What I think is significant is back in 2004-2006 Monster.com was still a growing company whose idea was novel. We had a recession from 2001-2003; how did the number compare back then? Can your charts go back that far? Would it even help if you did?
Neither. It is just that as events that I foresaw are now unfolding it is difficult to find new things to say. And I see no profit in "I told you so" posts. I leave that to others.
And to be perfectly honest, the weather is more conducive to outdoor activities like biking and tennis rather than blogging.
But rest assured that I am watching VERY carefully. ...............
The Monster Index does not track only its own activity but also that of other online employment services. It is quite comprehensive. BTW, the data only go back as far as the chart shows.
I was saying similar things as you, but I have to say that I really expected things to fall apart faster than they have. Of course, I don't have your insight and experience from a macro perspective and your experience in finance.
It's seems to be a "Slow Train Comin'" (Bob Dylan song). It seems this song he wrote some 25 years ago is becoming relevant again. What's old is new again, I suppose.
I guess that the question I and many others are asking is: how much longer can this house of cards stand up? And how long is it going to take for it to play out?
My prediction is for slow and grinding, precisely because this is not a "technical" correction that applies only to financial markets. It's the "real" economy that is in trouble and it will take lots of time to correct it. Years, not months.
Let me put it another way: we are still focusing on "saving" the global FIRE/consumerism economy, which depends on Permagrowth for its survival. This is a fundamental, ongoing mistake. It will persist until the entire world has a collective "aha!" moment and replaces this outdated model with something else.
First, a math puzzle with GDP - nominal decline QoQ of 11.6%, but rate of change in 'real' GDP growth rate is up 111% (from 0.9% to 1.9%, refs cited on my blog)! That there is some kicking deflator action.
Second, ran into an article by M. King Hubbert I had not seen before, "Exponential Growth as a Transient Phenomenon in Human History." Prescient.
Current asset valuations are dependent on Consumerism / Permagrowth. Hence the current establishment will continue to uphold this fundamental, ongoing mistake.
It's unlikely that we will reach a collective "aha!" moment.
It's more probably a collective "Oh Shit!" moment.
my usual morning routine. i am feeding the baby while reading hell just now realizing that as she falls asleep the meaning of serene
new paradigm. living small. paper towels are a luxury. a song from the eighties is starting to play. remember the power tie! double gun with a wink...sigh.. cant go back in time
I grow my vegetables and buy used shirts. my 96 chevy sometimes needs a $500 oil change.i feel noble. canary in the mine airline is reporting a world of hurt
shhh she is asleep and i am in the moment, this not that or there or then. now as it is examined without judgement.
US Airways will likely begin selling pillows and blankets to its customers by the end of the year, following closely behind discount carrier JetBlue Airways Corp., which said Monday it will start charging fliers $7 to use a pillow and blanket.
It this is going to get real slow.........with the Fannie Freddie bailout it will be another 6 months before we see real numbers! * I expect the next two quarters that Banks and other will report that all is fine and under control! ** Then Boom the whole blows apart with devistating numbers. WE can move forward if the government will let this thing crash.
You folks just aren't getting it. They have to keep it together until Bush is out of office. Only problem is, he'll be blame thru the 1Q2009. Honeymoon you know. I don't see how they can keep a Bush recession out of the history books.
Speaking of predictions, what are yours? Someone recently made a comment about the post revolutionary war (the last great credit crisis?) mass migrations and that makes sense. I don't know if the hyperinflation will be coming down the pike this time though. I just can't picture the form it will take.
I see the continued annihilation of the rust belt cities (with the exception of proactive places like Pittsburgh) but I can't conceive of what new industry will propel the new migration.
Strange, mass migration seems a more palatable concept than new industry.
Goldie, in case you haven’t already learned, I tend to analyze everything thru an evolutionary/fractal prism (I won't bore you with the details if you don’t know what I am talking about). So If I had to ‘guess’, my safest 'guess' for the future would be that 'the rich will get richer' (except for the rare time when they won’t). But I would add that my term 'rich' means a whole lot more than just income or material wealth.
You do bring up a very interesting point on mass migrations (I'll bet yoyomo has thoughts on this). I thought a bit about the suggestion, since it clearly has been the case in the past, but I tend to think ‘not this time’.
The world seems to be getting more and more concentrated into centers of intellectual capital (I tend to think of these centers as the nervous tissue of our collective organism we call Society, you and I are just cells in its collective body). And even as technologies like the internet make the physical continuity of these intellectual centers less and less necessary, still the cultural differences their very existence creates vs. the rest of the world will continue to enforce this process of centralization and isolation.
So to use but one example-- where people left Britain or Russia in the past to create a ‘new life’ for themselves amongst the undeveloped resources of (say) South Africa-- today the immigration is really an intellectual more than a physical geographical journey.
Take energy for instance. It has obviously been a major impetus for immigration over the last 200 years (think Texas, Pennsylvania, etc…). And imagine that the young of today ‘migrate’ in search of energy.
In all likelihood, the ‘new energy’ of tomorrow will come from renewable sources (say wind or solar). So for a young person to make his/her fortune, their migration will need to be intellectual rather than geographical.
… Those groups with moderate resources in the curent system, but who also clearly stand to lose as the world changes yet again, will be the most dangerous—think Russia and Georgia today.
… Those groups with no understanding of the new energy system (no skills to help invent/build this new world) will be left further and further behind (like the world we saw exposed by TV in New Orleans when Katrina hit). People will use the very real tragedy in this group to their own political ends (it is a endless source of ammunition in the war of 'reputation destruction' waged by all sides), but I think the group as a whole less dangerous than the first group.
Interesting point Thai, you make me think we are on the cusp of another milieu of innovation. I wonder if the internet has displaced the need for physical proximity. Intellectual migration was always a component (the main force perhaps) behind past milieus of innovation: Glasgow and ship building, Detroit and automobile design and construction, Paris and things intellectual, cultural, and artistic in the late 1920's
The death of the middle class combined with intellectual evolution will lead to....
Goldie, was there ever really a middle class in America? I would say 'yes', but it didn't really have much to do with wealth or income. For while it is true that the ginni coefficient describing pareto wealth distributions is worsening in America, even at its fairest time period in US history, the spread was still pretty wide.
From my point of view, the term middle class has always been nothing more than a state of mind which helps build social trust... something like 80-90% of Americans describe themselves as middle class(an obvious statistical impossibility).
The real issue for the future is social trust and cooperation. And this is always the toss of a coin.
Dink, I came across this and couldn't resist forwarding it. I hope you see why...
Greenie, I mentioned later in the paragraph "... I would add that my term 'rich' means a whole lot more than just income or material wealth".
I wasn't trying to get into a distinction between someone earning money from 'passive income' on their wealth vs. someone earning money from the fruit of their own labor (well call them rich investors vs. laborers). I assume this has its own long term oscillation (actually I have a question for Hell: does this oscillation occur from historical credit-debt cycles?).
Anyway, my guess is that if you look at the group of people we all collectively refer to as 'the rich' thru history, you would find that investors vs. laborers go up and down in terms of who earns/makes/own more.
And I would think(?) that rich people who make their living from the fruit of their own labor will do much better in a period of deflation.
Was there ever a middle class? Were my fondest recollections a mirage? My aspirations nothing but folly?
The one income family. Hand me downs between neighbors. Above ground pools and burgers cooked on charcoal using rusty metal barbecues.
Status being demonstrated rarely if at all. A new car is occasion for neighbors to gather and gawk. Fireworks and sparklers on the 4th. Ghost costumes on Halloween. Plastic saucers on snow days. Grandparents live with you.
Goldie, I am not saying it is/was an illusion at all... only the way you may have defined what it meant when asked (then again who am I to argue with that view?)
I certainly have always thought of myself as middle class; whether I actually am is another matter. But whether I 'actually' am or am not, it doesn't change the connection I feel towards the ideal.
We regard him who does not participate in public affairs not as one minding his own business but as a totally useless man (Pericles, 430 BC).
Is the Hellmeister changing his opinion about plain folks? I won't use the slur "sheeple" but it seems the inability to do basic analysis by the vast majority of "citizens" leaves the US open to catastrophic mistakes such as Bush.
Well I like to look on the bright side, if the folks elect McCain we can be entertained in a real-life version of Dumb and Dumber and the empire will crash faster.
I'm all for reality now and bankruptcy--in finance and conscience--is the reality of this country.
Marcus, do you really think Shrub won an election-any election? Ask Mr. Google about it, especially about Ohio and New Mexico in 2004. In the US, we seem to have 'selections' every couple years...
Marcus said "... I won't use the slur "sheeple" but it seems the inability to do basic analysis by the vast majority of "citizens" leaves the US open to catastrophic mistakes..."
So you too see things thru at least a part of my fractal prism!
I am not sure if you remember when I mentioned the model sugarscape many months ago?
Anyway, if you do remember, you might not also remember I commented that one of the most haunting results of the sugarscape model was the realization that some of the sugar agents never moved on to the rich sugar mountains. In effect, the agents were to stay poor forever.
When the Brookings Institute team asked "why?", they discovered (perhaps predictibly?) that these poor sugar agents had exceptionally efficient metabolisms (so could live in the arid lands) but incredibly poot eyesight. This meant that despite living right next to incredibly rich sugar mountains, the poor sugar agents couldn't see the mountains therefore never moved off their poor lands on to rich lands instead... never.
But if you think thru the model, and think of the more general isuue of all information, depending on what you are talking about, all of us face this same problem. You see things I clearly cannot, and vice versa. It is just a fundamental problem of information and frame of reference itself.
Yet the truth of this fundamental information problem is an entirely different thing than trust, integrity and faith in each other.
Why do you want to impart a sinister interpretation towards Hell's motivation to change his subtitle?
Miss your fantastic analysis Hellasious.. We all know that things are unfolding just the way you predicted, but it just isn't the same without the jaw dropping charts and graphs that we have come to love on this blog. I know I'm not the only one that waits to hear your play by play, please please if you can, give us a chart now and then!! Thanks so much!
So I've been out wandering in the desert (metaphorically) trying to synthesize a lot of data and theories to hopefully get a less uncertain belief on the future of humanity (I'll return to this later).
First, there will be ranting about some of the posts here that I've missed or read too quickly.
*Hell, take your time playing in the sunshine until the Muse returns with inspiration. Please note that you do not have to limit yourself strictly to financial matters as your readers have wide interests. *Anonymous- STFU *LuckySingaporean, the cheerleader has thrown down the pom-poms and is angst-riddenly smoking under the bleachers. The game is not going well, eh? * Okie, nice article. I don't understand Level 3 assets and they seem to make up an incomprehensible amount of money. *re: Mish- I've been lurking there, but the poster are hard-core goldbugs and frequently seem to discuss guns. I'll try this London Banker thing (along WITH Sudden Debt). Yoyomo- I read some of Long Emergency as you recommended. Puts this whole Georgia v. Putin thing in an interesting light. Greenie- Why must you be so loathesome? Perhaps if you, Putin, and Cheney all donate your brains to science we can identify the problem and cure it. Marcus- a lattice of individual will and uncontrollable events. Like nature and nuture. Thai- I just saw that like to the BPD article. Its stuff like this that gets me wandering into the metaphorical desert trying to reconstruct my beliefs. If we can identify rogue psyches and fix them maybe the good people can stop wasting all their time combating the bad guys so they can get some work done fixing the planet, curing disease, and building colonies in space.
I 'think' I understand where you are; your words sure sound like a place and time I remember once being in years ago...
While I can't share anything 'useful' (at least in any practical sense of the world) with you about your fears, still if you do not mind, I will share my own journey to see if seeing things from my frame of reference, also gives you the same 'comfort' it gave me.
First, understand you do not need to apply more logic to the problem of this ‘fear’ you have (it is precisely here where yoyomo and I seem at our farthest). You do not need to look outside to seek 'safety' or an answer. You already have all the logic you need; you already know all you need to know.
Think of your mind as a computer at the cusp of its own self awareness (work with me for a moment). The think about your mind… You seem to enjoy ‘psychology’, perhaps this 'story' from NPR will help you think about things (please listen to the audiocast or you will miss the beauty of the story).
In your mind, there is no central 'dink' to who you are. No matter how much you try to find it, you will not find anything that is ‘more’ dink than anything else. All the cells of your brain just seem to 'cooperate', it is that simple... Now you might be fooled for a moment into believing they all cooperate because they are close of each other- they all share the same DNA. But what is cancer then? Just think about it… I am ‘sharing’ with you, that if you go down that rabbit hole (go ahead if you want), you will find it too has no end and clones sharing identical DNA is not the 'complete' answer.
Now think of the world/universe as nothing but infinite information and your brain as a processor of that information. Do you see the fractal yet? Do you see how we live in a fractal world/fractal universe? Again, to remind you, a fractal is something that is 'self similar' (Google it if you are unsure). The more you 'fracture it', the more it is the same.
The reason I say this is that by definition, the risk to humanity is the same as it has always been, is the same as it will always be. The very network we are talking over, the society we all live in, our bodies, all of nature, the economy, geography, even the 'chaos' or 'randomness', etc... are all fractal. The fact that you see danger now from your particular frame of reference does not change this one bit. In fact, I would argue it increases your responsibility to cooperate and have faith in your fellow (wo)man, since now you see the ‘danger’ in things, where your fellow (wo)man may not as they look at information differently. It does not mean they do not care about you, and vice versa.
As I don't really know anything about you accept for what you post, and I make my own ‘inferences’ on what you mean based on my own frame of reference, I wonder if the following will help:
IF I remember correctly, you once said you chose the blog name of Dink from a character in a novel by Orson Scott Card called Ender's game, is that correct?
If my memory also serves me correctly (it has been a long time since I read that novel), Ender’s Game was a novel about a war between humans and an alien race. And the great 'irony' of the novel’s war was it never needed to happen. It occurred ONLY because the two races could not communicate with each other. Or to be more specific, their minds processed information differently. But once this ‘truth’ was realized, they decided to have 'faith' in each other and 'cooperated'. (As an FYI, this issue suddenly reminds me of why I always have a problem with people eating Octopi (even though I eat meat), a WAY intelligent animal that evolved who’s non-mammalian intelligence evolved from a branch of our common ancestors an incredibly long time ago… somehow just seems wrong to destroy it).
Anyway, the problem in the book was really just a frame of reference problem. And while I realize this is not a ‘real’ example, the point is still the same. (Did you know that thousands of people took to the streets when Sherlock Holmes was killed, so powerful was the ‘reality’ of his character to many Britons… think about it).
There is really just a choice between cooperate and not cooperate, and nothing else. And while you can try to spend forever trying to see if there is a way you can ‘game this’, you can’t.
Just like the CDO products Hell taught us about months ago, where the underlying moral hazard risk involved in the original credit transaction was ALWAYS inherent within the structure of the CDO, and could never be eliminated no matter how hard the bankers tried, so too in the infinite fractal of information can the risk of cooperate vs. not cooperate be eliminated. The risk is always there. ALWAYS.
Remember, if a cluster of information wants to 'manipulate' other information 'in order to make it useful”, the best way to do it is to cooperate with another cluster of information. It is that simple.
But for cooperation to occur, the first and second cluster of information needs to have 'trust' or ‘faith’ (or whatever else you want to call it) in each other (or they won’t cooperate). It is a choice; it is as simple as that.
Of course the alternative is for the two clusters of information to not trust each other and not cooperate— but they will not benefit from cooperation either.
It is a choice, cooperation or non-cooperation where the benefit is exactly balanced by the risk.
Now think of this fundamental fact, and again think about the universe of infinite information.
The risk never goes away, no matter how ‘high’ or low you are on the information food chain. The risk remains constant… Or as complexity scientists like to say, no matter how ‘complex’ the information structures become, their risk of disruption is constant.
I won’t go into it here, but it is the same thing as the conservation of energy (you have heard of that law?), it is also know as the law of the conservation of risk.
Have you ever really thought about what the law of the conservation of energy means? What it implies?
Now think on the following last issue… Why have scientists found a part of the brain responsible for ‘faith’ or religion or god? Google it if you don't believe me... better yet, as an FYI, look up how certain drugs (like mescaline, or psilocybin affect this region if you still don’t believe me).
Just look around you, you will be stunned by the fractals... Lift up your hand and look at it, I mean it, really look at it it is right there in front of you…
You are not at any more risk today than you once were. The universe/world is self similar. The risk is constant and infinite.
Nothing is happening today that should change your fear of the world. But it is your choice.
I make mine, you make yours. And by the way, there is nothing ‘useful’ about what I have just said. I understand this. Your risk remains the same whether you cooperate or not (this is the classic fallacy most religious prosthelitizer seem to fail to comprehend).
It is your choice. We will all die, that is a given. If you are willing to ‘trust’ me on anything, trust me on that (I see a lot of death, and I mean a lot).
You can’t ‘game’ the system, no matter how hard you try. Life is random. fractals are everywhere, and trust and cooperation are a choice. But I can say, the higher the complexity of the information structure, the more trust there is. It seems to me if you want to see these information structure, trust and faith and cooperation is all you have.
But your risk today is not greater than it was yesterday, nor will it be greater tomorrow.
Thai, FYI re. octopi; once they mate the males go into a stupor and can't defend themselves and are ripped apart alive by the fish one mouthful at a time starting at the tentacle tips and working their way toward the head, the females go into their stupor and suffer the same fate a few months later after the eggs have hatched. As long as they are killed ethically, you do them a favor by catching and eating them and so saving them from a worse fate. True, you deny them the chance of reproducing but each female produces 40-200K eggs so you don't need many to sustain a population. BTW they have a very short life-span (1yr or less for most species, longer for the PNW giant octopus which generally isn't eaten).
Anyhoo, I've never tried LSD but if it'll take me where you reign I might be tempted. You should have been a Baptist preacher, your zeal for converts is truly inspiring.
I am curious about this fractal thang, but can't seem to make the leap from simple equation reiterating itself in interesting patterns to human thought. I can link it to a genetic cascade resulting in evolution, but once consciousness comes in to play I get wrapped around the axle(s).
I'm heading out on a camping trip (no metaphor; an actual RV by a river) now, but will try to open my mind further.
Have a great weekend, Thai and Yoyomo. Try not to fight too much( and also try to keep Greenie in line in my absence).
Thank Goodness you're still talking to me Thai. I saw an episode on Nova (I think) a few years ago where they showed an octopus unscrewing a jar to get the crab inside so I don't doubt their IQ. My point simply was they live short lives that end brutally so being caught by a fisherman isn't on the level of tragedy as killing a whale.
BTW, did you see the story a few months ago about the whale that was killed and when it was being butchered a harpoon from the 1870's was found embedded in its shoulder bone. It had lived for 130yrs after its first escape from death only to meet the same fate more than a century later. Reminds me of Appointment in Samarra.
Dink, Enjoy your trip but please be safe on the water, I had a dear friend who drowned on a whitewater rafting trip. That sad episode also had shades of Appointment in Samarra as my friend had narrowly escaped death when he was hit by a drunk truck driver a couple years prior but death delayed would not be denied.
I have never been 'upset' for even a moment. You just seem to keep missing my point about trust and faith in each other-- which as far as I am concerned is the only real source of wealth that exists.
This entire credit crunch is nothing but a global loss of trust. The 'bubble' lasted far longer than 'good people' like Hell would have ever predicted (people kept the faith). Yet they were warning us for years and few listened.
I have to disagree Thai, something very fundamental changed; people started defaulting in large numbers and the cash flow dried up so that the fraudulent illusion of solvency was no longer able to be maintained. The kids' marble example had no service-payment stream attached to the marbles.
Then one day people finally started 'losing faith in each other'
Yes, for good reason. The bubble in housing was based on fraud. People gave trust when it wasn't warranted. Your statement implied that if they had just "kept the faith" that everything would have been alright. There are some people don't deserve to be trusted.
I agree with Yoyomo, for the most part. Something fundamentally changed: people started to realize that they were being defrauded. Yet, in many instances, they were powerless to do anything about it. Others did have some remedies ("walk away" as in some California homes); still others had to go the bankruptcy route which destroyed lenders "faith" in their ability to repay and prevents them from borrowing, or makes it far more expensive.
So, Thai, how would you restore trust? The Devil is in the details, you know.
The way Jesse frames the issue; I see what is causing him to lose trust... And I am not at all saying 'keep the faith' at all costs and everything will be all right (in fact I am saying something far harsher in order for people to ‘keep faith’).
while I agree with you that some fraud is the problem, I don’t agree with his (or your) solution to this problem
As I look at what is being written, you have paradox (just as I think I may be suggesting a paradox to you from your point of view). By the way, as I am sure you have realized, I am comfortable with paradox ;-)
Let me illustrate what I mean Okie and Jesse’s first paradox from Thai’s point of view (let’s call it paradox 1). Paradox 1:
You suggest issues of fraud and moral hazard in the lending industry can be solved by: 1. Creating more layers of process or government oversight, etc... 2. SOME of the people who committed the fraud are in the government
IF I understand you correctly (and I readily admit I may not), your solution for paradox 1 seems to be 1. Create more government oversight of the process 2. Get rid of the crooks in government so more process can move smoothly
But I see paradox 1 as a paradox because when I hear the word “moral hazard”, I immediately realize that moral hazard ALWAYS goes two ways. Only the reason we called it ‘moral hazard’ and therefore think of it as ‘asymmetric risk’ is because the other side of the Moral Hazard has been ‘pushed’ somewhere else in the system. It does not appear in the problem being framed.
But my ‘reality’ tells me it there, you just ‘covered it up’ or ‘moved it off the books so to speak’… kind of like an SIV (does this make sense?). And from this standpoint, no amount of process or government can solve an issue of moral hazard. If a part of a process is built on human ‘fallibility’, no matter how big that process gets, the human fallibility will still always be present in that system or process. The risk never goes away.
I therefore suggest the following solution (really Plato did) 1. Focus on the integrity of the individual 2. If the integrity is in question significantly, throw the person out of the system, but don’t change the system. 3. The ‘bad apple’ should not be part of the ‘kin’ boundary anymore.
Have you ever thought what ‘reputation’ really is, and especially how it operates within an evolutionary system? (Does this make sense?)
Paradox 2: You suggest that taxing corporations more will help solve issues of trust with the ‘middle class’ since they have been getting away with fraud
The paradox from Thai’s perspective: 1. Companies are not people 2. People have been using companies to shield their own bad actions 3. Companies are easy to destroy and reform 4. A new company can still have the ‘bad people’ in it 5. By not PERMANENTLY destroying the reputation of bad people, but instead focusing on the ‘companies’, not only do we get a waste of energy but the bad guy won- they used their ‘shield’ to get away with their criminal behavior and to do it again— the get to go on and build company after company
Paradox 3 You suggest that the ‘bubble’ was created by fraud and that going after (this is where I am a little unclear… EVERY rich person? Everyone in Wall Street? Every ‘company’ in America (and forget the people)? And I am not even sure how this will help trust—is a ‘pound of flesh’ issue on anyone, anything more financially successful than some median? But what about rich people who were warning everyone about this issue? They are out there?
Who committed the fraud? SOME rich bankers and mortgage brokers and financial ‘innovators’ on Wall Street- YES SOME poor person who was looking to make a quick buck- YES Actually, I would be interested to know the ratios of homeowners who committed fraud to the ratio of financial service worker who committed fraud
And what about the people who were ‘naive’ but didn’t actually commit fraud. They joined in the bubble. Should people who had nothing to do with the bubble in any way (renters?) be required pay up?
Paradox 4
A ‘core value’ of Justice or Better that ten guilty persons escape than that one innocent suffer. --English jurist William Blackstone
1. But justice at what cost? 2. Whose justice? 3. Does one injustice supersede another injustice? 4. Who chooses this hierarchy of injustices? a. Is it a ‘judge’? What about his/her integrity? 5. What about when one justice conflicts with another?
Thai’s perspective the paradox is where is: where do we ‘draw the line’ 1. OK, but what about 11 guilty people free per 1 innocent? Or 100 guilty free to prevent 1 innocent convicted? 2. The same logic is applied to everyone
These are all ‘boundary issues’
So to answer your question “how would you restore trust?”
Focus on punishing ‘bad people’, no matter how ‘high’ or ‘low’ they are in the system—all of them are destroying trust. And while it might be better that 10 guilty go free so 1 innocent is not lost, I might not agree the number should be 50 either.
‘low’ does not get any more of a free pass than ‘high’, just because of status ‘low’
And people should have their reputations follow them around.
But one last thing... when you do punish 'the crooked', remember that whatever system you use to punish crooks also has fundamental problems with moral hazard within its system.
Thai, No one would disagree (at least publicly) that the corrupt, whether hi or lo, should be punished but that doesn't negate the fact that some systems are more susceptible (usually by design) to fraud and abuse. There was far less abuse in business back in the 70's than there is now. There may have been individual cases of wrong doing but it was never systemically pervasive. Either people were inherently more angelic (doubtful) or the safeguards built into the system were purposely dismantled since then for the benefit of a targeted group of beneficiaries.
For all your writing, you never answered my question. You never stated what process you would use to punish only those who have done wrong. Details please.
What, are you running for public office? You spoke in generalities and you shot barbs at me, but you never gave any specifics of how you would implement your idea of only punishing bad people.
I think tracking reputation will work. The old adage: "who will watch the watchers" remains, but this is nothing new. Who tracks the reputation, that is a whole can of worms. But it is clear that is what our ancestors on the savannah did for millions of years.
We do it right now with ebay buyers and sellers (and interestingly, the buyers-who have more power in the relationship, are pushing back and demanding their reputation NOT be tracked-- and they often have a good reason).
I do like you idea of piercing the orporate veil.
But I have one question?
If you 'pierce' the veil and learn there is nothing bad going on, that there are no 'bad people'-- who pays for that?
Does the plantiff's lawyer pay for it? Does the plantif? Does society? Dose the company just have to 'eat it'?
If you keep the 'cost' at the point of 'piercing' (i.e the plantiff's lawyer or the plantiff) so that everyone can see the bidirectional moral issue (and therefore not create an asymetric moral hazard issue), I am in favor of the idea.
But if you push the bidirectional moral issue onto someone else thereby create an 'asymetric risk' moral hazard issue (say taxpayors or the 'good people' in the company, etc...) then I am not.
As the cost of a 'bad piercing' will be born by someone else.
Otherwise we agree The same issue applies with product liability.
Oh, I think I see... took me a moment (sorry). You mean once proof of wrongdoing has been determined in court, the court allows the plantiff to go after the individual for certain extreme things?
This is no different than what I currently face with my professional liability. Your proposal seems reasonable enough to me. I would be thrilled to see a similar standard of professionalism placed on other people.
Yet I still think that in order to get larger 'buy in', you change the payment structure of courts to a form of 'lose pays everything', as I understand exists (?incorrectly) in Briton.
Watching late night adds where law firms 'trawl' for class action plantiffs just gives too much of an appearance of moral hazard to the system, at least from the point of view of someone fearing a law suit.
I am well aware of this issue from discussions with my colleagues; physicians too are 'losing faith' in the system and this is one of their biggest complaints (In truth I am not so sure frivoulous lawsuits are as big an issue as physicians make them out to be, but they do destroy trust).
Yet I still think that in order to get larger 'buy in', you change the payment structure of courts to a form of 'lose pays everything', as I understand exists (?incorrectly) in Briton.
No, I am not advocating the British system. Stripping a corporation of its corporate veil is in no way related to the "loser pays" rule. Most of the legal theories involved in stripping a corporation of its legal status involves suits in tort, which almost never have the "loser pays" rule in effect.
Watching late night adds where law firms 'trawl' for class action plantiffs just gives too much of an appearance of moral hazard to the system, at least from the point of view of someone fearing a law suit.
Let me give you an example of why these kinds of ads are sometimes necessary. Credit card companies have been known to "hold" a payment made (on time) until it becomes "late." Customer is then charged $49 late fee. Sometimes this results in their being over their limit whereby they are charged another $49. Customer goes to see attorney. "I was wrongly charged fees," they tell the attorney. "Sorry, it's not worth suing over," the attorney tells them back. "There is not enough money involved to file a lawsuit."
However, attorney finds out that this practice is done in 1 out of 10,000 customers of the financial institution. Let's say the financial institution has 10 million customers. That comes to 1000 customers per month charged $100 wrongly (+ interest now computed @ 30% compounded daily making it effectively 35% APY -- and, as a side note, this 35% APY applies to their entire balance, not just the $100), meaning that the financial institution's profit margin has been unjustly increased by $1.2 million per year + 35% interest on the entire balance of all those 1000 customers.
It is unlikely that each of these 1-in-10,000 people know each other. And since each of them has been cheated out of a little more than $100, for each one of them, it is not worth suing over $100 (the legal fees would be more than that). So, unless you can find a way to bring them all together in one lawsuit, it will never be economically viable to sue.
This happens a lot more than you realize. And it's not just in the credit card industry.
So, other than advertising, how should a lawyer find all these people?
I am well aware of this issue from discussions with my colleagues; physicians too are 'losing faith' in the system and this is one of their biggest complaints (In truth I am not so sure frivolous lawsuits are as big an issue as physicians make them out to be, but they do destroy trust).
Medical malpractice lawsuits add no more than 1% to 2% to the cost of medical services. (Does you medical malpractice insurance cost amount to, say, 3% of your salary, accounting for a profit for the insurer?) Insurance companies are just scamming you. They are doing the same thing to you as the credit card example above. You are just too dispersed to fight back.
Back from camping in Wenatchee (sort of the San Joaquin valley of WA)where I saw rivers flowing with apparently abundant and clean water, fields collecting photons and transforming them into things I can eat, and people exhibiting trust in eachother and self-management in themselves. So I'm in a good mood, but do appreciate the sharing of metaphorical journeys that you gave.
So I 100% agree we're all a bundle of neurons processing information and that perception is reality. Here's some camping synthesis:
Genes just wanted to be replicated and the individual temporary carriers weren't of great concern. But the genes kept adding on features to the carriers and one day these features resulted consciousness. It was okay at first; it made the carriers better survivors for more replication and the hormones still created emotions which drove the carriers in the right direction anyway. But the carriers' consciousness was forming complex patterns far beyond their original purpose. This led to a carrier's revolution (thanks for the pleasure hormones, but I'll use birth control). Betrayal! The carriers living for their own purposes instead of the gene's purposes. Well, sort of. There are 6B humans who are all in different stages of feeling/logic ratios. Many still driven to goals they haven't questioned using methods they haven't questioned. Each of these "equations" (strategy, personality) processing the information differently and behaving accordingly (iteration).
Okay, so help me break through here. I perceive fractals to be clear, logical, understandable. They look complex, but once you understand the base equation you see the logic and simplicity. We 6B have sloppy base equations that keep changing. I don't see understandable fractal patterns emerging; I see tangled mess. Perhaps my processor needs upgrading.
Thoughts on fraud: Perhaps these people are committing fraud against themselves. They actually believe they'll make good on their promises because they haven't thought their obligations through or have sufficient (or correct) data. Some of the most irresponsible people I've ever met have no idea what they don't know (and wouldn't believe you if you told them). If fact, they're obnoxiously self-confident. The stereotypical teenager is the perfect example ("I won't get addicted", "having a kid won't be that much work", etc.).
Dink said "Some of the most irresponsible people I've ever met have no idea what they don't know (and wouldn't believe you if you told them). If fact, they're obnoxiously self-confident."
This statement applies just as much to me and you as it does to 'those people'.
The fact you see a different information structure does not even make yours a larger information structure (though it could be).
While perception is 'reality' to your consciousness, true reality is much much more than what your consciousness contains (all of us are cursed with the problem: 'I don't know what I don't know').
Let me help you see fractals everywhere a little better.
Take the analogy of building larger structure by using some kind of 'building block' (when you hear the word 'building block' you should realize there is a fractal).
One makes larger structure by reiteratively combining the building blocks over and over in different ways untill they reach a a 'boundary'.
Example: The cell is the 'basic building block' of life.
If you apply a reiterative pattern to that building block (the cell), you get all the 'structures' we can literally see with our own two eyes in nature-- plants, animals, etc...
Again we simply reiterate the basic building block in different ways and let them grow towards a 'boundary'.
Think how physical compounds are made of the 'building blocks' of atoms (mixed in different iterative patterns), yet atoms themselves are made of smaller 'building blocks', etc...
Or you can change the boundary issues for a particular building block and then reiterate that new building block. So a cell with different boundaries becomes a 'specialized cell' such as a neuron. Reiteratively combining neurons and you get a nervous system; reiteratively combine this and you get the brain.
But it continues, the brain itself has reiterated structures creating a 'higher' and 'lower' brain itself (just look at a google image of a brain dissection if you were not aware).
Or think of how the brain works as a computer. Shift your point of view to 'information'. For the brain to 'store information, it creates representations of that information (we call these objects in computer science) and then we just reiterate these objects over and over in different ways until we come up with a 'useful' structure. We reiterate this structure to get higher structures yet again.
Or think about society: If each individual in society is a 'building block' of that society, if we reiteratively organize these people in different ways we get different societies, etc...
All these reiterations of basic building blocks continue until they reach boundaries they cannot pierce.
So as just one example (the world) the fundamental boundary might be all the usable energy on the planet + the energy which enters our planetary system from outside (which we tend to see as the sun, not really knowing for sure if there are other energies hitting our planet that we are simply unaware of).
And one interesting 'observation' of a bounded fractal system...
Take the analogy of a 'three dimensional planet', once you have defined the boundaries of your system (the planet), all points of view looking at the system are actually necessary to maintain the integrity of the boundary itself.
Left is not more or less necessary than right. Same with up vs. down or any permutation of the above.
So for a hypothetical two dimensional society, to maintain the integrity of the boundaries of the society, 'left' is just as necessary as 'right'. One cannot exist without the other.
But of course, society has a lot more than two boundaries (though I am sure 'fundamentalists'-- people who can only look from their own frame of reference or point of view) would try to collapse the system to a never ending 'war' between themselves and 'the other side'. Any attempt to tell them you are looking 'up' or 'down' on them is perceived as heresy.
Go 'surf' the internet a little and you will see what I mean... People's comments clearly 'bare this out' (the prison of our own mind).
And I really recommend you go surf, where you would otherwise NEVER surf, places where some points of view are completely beyond your reality. Of course, since you can't see things from their point of view, you have no way of knowing if 'it really does make sense' or whether they truly are 'crazy'.
At some level you just have to trust it or reject it.
Again, we just think we understand the boundaries of our world because that is all we understand, but 'reality' tells us those boundaries are far greater than we understand.
But again,
I reiterate, there is nothing 'practical' or 'useful' about this knowledge (well, I guess it could help you 'organize' a creative process for those in a one dimensional world), but other than that, the only other thing I see it 'practical' for is that it can calm a 'fear' from a disruption one has in the boundaries of the world they thought they understood.
The odds have always been against us, why fear it more now?
So a few 'fractal' predictions:
More complex intelligence will likely be generated from building blocks of a basic unit of intelligence...
More complex cooperation will likely be generated from basic ways to cooperate...
More complex ways to kill ourselves will be generated from basic ways to kill ourselves...
And the underlying 'risk' or 'problem' in the basic building block of the complex system will always remain and 'scale' with the complex systems size...
Basic 'inequality' will always scale with the system. Wealth will always be a 'fractal': and I mean wealth in every possible way it can be used.
(Hell is going to start requesting urine samples with posts like this)
Basic block to complex structure( Atoms(no quantum physics #$%^@)>molecules>proteins>cells): good to go. Pretty straightforward boundaries.
Stem cell to specialized cell still simple enough. But if an entity were conscious that it was a neuron structure and that it had the ability to volitionally restructure itself...couldn't it "game" the boundaries? It seems this particular set of code (to be curious, inspect logically, and install; learn; differentiate-select-adapt)is....good.
My mind just stalled, but when it starts again I'll ponder constructs and boundaries again.
"Oh Benson, dear Benson, you are so mercifully free of the ravages of intelligence." -Time Bandits
If you think about all of quantum mechanics (QM), it is really just probabilities of cooperation applied to quantum or 'building blocks' with the single additional observation that the speed of light is always constant.
As the scientists looked at smaller 'building blocks', they had to start to make even smaller building blocks, like quarks, etc... to explain the original building blocks they found. And each time they found these smaller building blocks, they then realized that not all of these building blocks cooperated with each other, so they had to figure out whether a particular building block 'cooperated' or not; coming up for wonderful names for this cooperation like charm, up, down, strange and bottom, etc...
Then when they realized this had yet further building blocks, they came up with string theory, but realized even here too cooperation was an issue so they had to again give names to the cooperation permutations, etc...
Even 'ideas' like space or time (or their combined "space-time" and the building blocks were combined) came to be recognized as built from yet smaller building blocks: 'bubbles', etc...
The idea of 'information' itself had to become quantized into smaller building blocks (remember that old favorite of classical quantum mechanics, the Heisenberg uncertainty principle?). And yet these building blocks were in turn built from smaller building blocks, etc... No joke
All with the fundamental binary choice of 'cooperate' or 'not cooperate' (again, the physicists geve this cooperation many wonderful different names).
Check my explanation with someone who understands QM theory well.
Also: "Stem cell to specialized cell still simple enough. But if an entity were conscious that it was a neuron structure and that it had the ability to volitionally restructure itself...couldn't it "game" the boundaries? It seems this particular set of code (to be curious, inspect logically, and install; learn; differentiate-select-adapt)is....good."
Remember, fundamentally evolution is a red queen game. But in the short term, the answer is 'yes'- 'but'... depending on what you are talking about, the neurons with self awareness could 'game the system' for a little while in the sense that they get ahead at the expense of other parts of the system (this might be akin to your brain 'divorcing' itself from the limitations of a 'biological' body-- say 'evolving' bionics, etc...)
But... it those neurons better be sure when they do 'go rogue' that it is really going to work out or the change will just 'kills itself'. Example: bionics get infected and there is no additional immune system changes to handle the new problem of infection in the setting of a foreign body, which is a VERY BAD infection to have, etc...
But more often than not, some silly neuron 'thinks' it is 'wise enough' to morph into a brain cancer and live forever, only to learn that the cancer killed the whole organism and with that killed itself.
This is the primary reason successful evolutionary changes are so rare (about 1 in a billion changes work according to data I have read), because the changes were dependent on other boundary changes also being present.
(and if you somehow pass your test he'll demand a hair follicle follow-up)
QM and rogue neurons- true, in an attempt to game the system many a wiseguy adaptation has backfired. Consequences upon consequences...
So our minds construct models of the world. Minds evolved under specific boundaries with a definite affinity for sensory data from the eyes. To absorb a new concept its best try to visualize it; take the abstract and map it to an existing, similar concept via analogy. This may seem inefficient, but we work with what we have.(focus sputtering out; take up thought at later time).
So fractals obey rules; minds don't. Or if they do, I can't visualize it/integrate it to an existing concept yet. I'll keep on it. Semper Fi.
"A conclusion is simply the place where you got tired of thinking." -unknown
I only recently realized that I'm missing this fascinting exchange.
I guess this is what happens when bloggers go on summer vacation and the commenters don't.
Somehow the conversation went from monster.com to a branch of metaphysics.
Thai says:
"Evil definitely needs good in a fractal world."
Just like people who want to troll blogs need blogs.
Dink says:
"Okay, so help me break through here. I perceive fractals to be clear, logical, understandable. They look complex, but once you understand the base equation you see the logic and simplicity. We 6B have sloppy base equations that keep changing. I don't see understandable fractal patterns emerging; I see tangled mess. Perhaps my processor needs upgrading."
Unless your fractal is, say, a 6 dimensional geometric configuration. Then it's not so simple.
Say for examle, a 6-dimensional Calabi-Yau manifold. Not simple at all.
I just think of human personalities as being the equivalent of extremely complex distinct geometric forms.
Glad to hear these musings interest you; always feel free to jump in. Hell has been patient with us pinballing off onto all sorts of tangents. I read "The Selfish Gene" a few years back; Thai seems to have been infected from mathematics. Interesting that these things seem to collide.
The scale of fractals (evolution, psychology, etc.)is stunning. One equation running amok through its iterations. One handy little DNA sequence comes together to form the first mitochondria and now look where we are. One clever person gets an idea for compound interest and now look where we are.
I like your statement that your personality is your fractal. Think of the cascade of events that result from that fractal. And that we can monkey around with the fractal and a different cascade will result.
What I think is significant is back in 2004-2006 Monster.com was still a growing company whose idea was novel. We had a recession from 2001-2003; how did the number compare back then? Can your charts go back that far? Would it even help if you did?
ReplyDeleteHave you been dumbstruck by events, or just vacationing?
ReplyDeletedumbstuck or vacationing?
ReplyDeleteNeither. It is just that as events that I foresaw are now unfolding it is difficult to find new things to say. And I see no profit in "I told you so" posts. I leave that to others.
And to be perfectly honest, the weather is more conducive to outdoor activities like biking and tennis rather than blogging.
But rest assured that I am watching VERY carefully.
...............
The Monster Index does not track only its own activity but also that of other online employment services. It is quite comprehensive. BTW, the data only go back as far as the chart shows.
Regards,
H.
Forget the bike Hel we need you here. Only joking, go on, enjoy the summer sun. Tennis?--love all.
ReplyDeleteH:
ReplyDeleteI was saying similar things as you, but I have to say that I really expected things to fall apart faster than they have. Of course, I don't have your insight and experience from a macro perspective and your experience in finance.
It's seems to be a "Slow Train Comin'" (Bob Dylan song). It seems this song he wrote some 25 years ago is becoming relevant again. What's old is new again, I suppose.
I guess that the question I and many others are asking is: how much longer can this house of cards stand up? And how long is it going to take for it to play out?
Fast v. Slow
ReplyDeleteMy prediction is for slow and grinding, precisely because this is not a "technical" correction that applies only to financial markets. It's the "real" economy that is in trouble and it will take lots of time to correct it. Years, not months.
Let me put it another way: we are still focusing on "saving" the global FIRE/consumerism economy, which depends on Permagrowth for its survival. This is a fundamental, ongoing mistake. It will persist until the entire world has a collective "aha!" moment and replaces this outdated model with something else.
Regards,
H.
H,
ReplyDeleteTwo things (of many passing)...
First, a math puzzle with GDP - nominal decline QoQ of 11.6%, but rate of change in 'real' GDP growth rate is up 111% (from 0.9% to 1.9%, refs cited on my blog)! That there is some kicking deflator action.
Second, ran into an article by M. King Hubbert I had not seen before, "Exponential Growth as a Transient Phenomenon in Human History." Prescient.
if banks suffer a bank run we have sudden death for the banks and the industry who will prevent this?
ReplyDeleteCurrent asset valuations are dependent on Consumerism / Permagrowth. Hence the current establishment will continue to uphold this fundamental, ongoing mistake.
ReplyDeleteIt's unlikely that we will reach a collective "aha!" moment.
It's more probably a collective "Oh Shit!" moment.
Change will be forced upon us, for greed blinds.
my usual morning routine. i am feeding the baby while reading hell just now realizing that as she falls asleep the meaning of serene
ReplyDeletenew paradigm. living small. paper towels are a luxury. a song from the eighties is starting to play. remember the power tie! double gun with a wink...sigh.. cant go back in time
I grow my vegetables and buy used shirts. my 96 chevy sometimes needs a $500 oil change.i feel noble. canary in the mine airline is reporting a world of hurt
shhh she is asleep and i am in the moment, this not that or there or then. now as it is examined without judgement.
next up: no fee, no wee.....
ReplyDeleteUS Airways will likely begin selling pillows and blankets to its customers by the end of the year, following closely behind discount carrier JetBlue Airways Corp., which said Monday it will start charging fliers $7 to use a pillow and blanket.
http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20080804/FREE/316413672/1066/newsletter01
Hell, any comment on peak oil? Time to go long crude?
ReplyDeleteThis blog spot is moribund.
ReplyDeleteKleptocracy: Word of the day. A government of, by, and for the robbers:
ReplyDeletehttp://freedominourtime.
blogspot.com/2008/07/big-bailout
-america-as-full-spectrum.html
This is what happens when citizens become disconnected from their government.
It this is going to get real slow.........with the Fannie Freddie bailout it will be another 6 months before we see real numbers! * I expect the next two quarters that Banks and other will report that all is fine and under control!
ReplyDelete** Then Boom the whole blows apart with devistating numbers. WE can move forward if the government will let this thing crash.
You folks just aren't getting it. They have to keep it together until Bush is out of office. Only problem is, he'll be blame thru the 1Q2009. Honeymoon you know. I don't see how they can keep a Bush recession out of the history books.
ReplyDeleteHell, I for one miss your postings. Is this a temporary break or a permanent one?
ReplyDeleteIt seems to me that you can still blog away without getting into a 'I told you so'.
While history rhymes, it never completely repeats itself. There must be something unexpected in the way this debt bubble is playing itself out?
You changed your blog's subtitle-- now where has your participation gone?
Thai,
ReplyDeleteSpeaking of predictions, what are yours? Someone recently made a comment about the post revolutionary war (the last great credit crisis?) mass migrations and that makes sense. I don't know if the hyperinflation will be coming down the pike this time though. I just can't picture the form it will take.
I see the continued annihilation of the rust belt cities (with the exception of proactive places like Pittsburgh) but I can't conceive of what new industry will propel the new migration.
Strange, mass migration seems a more palatable concept than new industry.
Goldie, in case you haven’t already learned, I tend to analyze everything thru an evolutionary/fractal prism (I won't bore you with the details if you don’t know what I am talking about). So If I had to ‘guess’, my safest 'guess' for the future would be that 'the rich will get richer' (except for the rare time when they won’t). But I would add that my term 'rich' means a whole lot more than just income or material wealth.
ReplyDeleteYou do bring up a very interesting point on mass migrations (I'll bet yoyomo has thoughts on this). I thought a bit about the suggestion, since it clearly has been the case in the past, but I tend to think ‘not this time’.
The world seems to be getting more and more concentrated into centers of intellectual capital (I tend to think of these centers as the nervous tissue of our collective organism we call Society, you and I are just cells in its collective body). And even as technologies like the internet make the physical continuity of these intellectual centers less and less necessary, still the cultural differences their very existence creates vs. the rest of the world will continue to enforce this process of centralization and isolation.
So to use but one example-- where people left Britain or Russia in the past to create a ‘new life’ for themselves amongst the undeveloped resources of (say) South Africa-- today the immigration is really an intellectual more than a physical geographical journey.
Take energy for instance. It has obviously been a major impetus for immigration over the last 200 years (think Texas, Pennsylvania, etc…). And imagine that the young of today ‘migrate’ in search of energy.
In all likelihood, the ‘new energy’ of tomorrow will come from renewable sources (say wind or solar). So for a young person to make his/her fortune, their migration will need to be intellectual rather than geographical.
… Those groups with moderate resources in the curent system, but who also clearly stand to lose as the world changes yet again, will be the most dangerous—think Russia and Georgia today.
… Those groups with no understanding of the new energy system (no skills to help invent/build this new world) will be left further and further behind (like the world we saw exposed by TV in New Orleans when Katrina hit). People will use the very real tragedy in this group to their own political ends (it is a endless source of ammunition in the war of 'reputation destruction' waged by all sides), but I think the group as a whole less dangerous than the first group.
This is my 'guess'
Interesting point Thai, you make me think we are on the cusp of another milieu of innovation. I wonder if the internet has displaced the need for physical proximity. Intellectual migration was always a component (the main force perhaps) behind past milieus of innovation: Glasgow and ship building, Detroit and automobile design and construction, Paris and things intellectual, cultural, and artistic in the late 1920's
ReplyDeleteThe death of the middle class combined with intellectual evolution will lead to....
something but what.
Goldie, was there ever really a middle class in America? I would say 'yes', but it didn't really have much to do with wealth or income. For while it is true that the ginni coefficient describing pareto wealth distributions is worsening in America, even at its fairest time period in US history, the spread was still pretty wide.
ReplyDeleteFrom my point of view, the term middle class has always been nothing more than a state of mind which helps build social trust... something like 80-90% of Americans describe themselves as middle class(an obvious statistical impossibility).
The real issue for the future is social trust and cooperation. And this is always the toss of a coin.
Dink, I came across this and couldn't resist forwarding it. I hope you see why...
"my safest 'guess' for the future would be that 'the rich will get richer' (except for the rare time when they won’t)."
ReplyDeleteRich do not get richer during deflation. Rich own rights to 'productive' assets. Value of those rights fall fast during deflation.
Greenie, I mentioned later in the paragraph "... I would add that my term 'rich' means a whole lot more than just income or material wealth".
ReplyDeleteI wasn't trying to get into a distinction between someone earning money from 'passive income' on their wealth vs. someone earning money from the fruit of their own labor (well call them rich investors vs. laborers). I assume this has its own long term oscillation (actually I have a question for Hell: does this oscillation occur from historical credit-debt cycles?).
Anyway, my guess is that if you look at the group of people we all collectively refer to as 'the rich' thru history, you would find that investors vs. laborers go up and down in terms of who earns/makes/own more.
And I would think(?) that rich people who make their living from the fruit of their own labor will do much better in a period of deflation.
Was there ever a middle class? Were my fondest recollections a mirage?
ReplyDeleteMy aspirations nothing but folly?
The one income family. Hand me downs between neighbors. Above ground pools and burgers cooked on charcoal using rusty metal barbecues.
Status being demonstrated rarely if at all. A new car is occasion for neighbors to gather and gawk. Fireworks and sparklers on the 4th. Ghost costumes on Halloween. Plastic saucers on snow days. Grandparents live with you.
Maybe your right. Never really was anything.
But damn, it was a good dream.
Goldie, I am not saying it is/was an illusion at all... only the way you may have defined what it meant when asked (then again who am I to argue with that view?)
ReplyDeleteI certainly have always thought of myself as middle class; whether I actually am is another matter. But whether I 'actually' am or am not, it doesn't change the connection I feel towards the ideal.
We regard him who does not participate in public affairs not as one minding his own business but as a totally useless man (Pericles, 430 BC).
ReplyDeleteIs the Hellmeister changing his opinion about plain folks? I won't use the slur "sheeple" but it seems the inability to do basic analysis by the vast majority of "citizens" leaves the US open to catastrophic mistakes such as Bush.
Well I like to look on the bright side, if the folks elect McCain we can be entertained in a real-life version of Dumb and Dumber and the empire will crash faster.
I'm all for reality now and bankruptcy--in finance and conscience--is the reality of this country.
Marcus, do you really think Shrub won an election-any election? Ask Mr. Google about it, especially about Ohio and New Mexico in 2004. In the US, we seem to have 'selections' every couple years...
ReplyDeleteMarcus said
ReplyDelete"... I won't use the slur "sheeple" but it seems the inability to do basic analysis by the vast majority of "citizens" leaves the US open to catastrophic mistakes..."
So you too see things thru at least a part of my fractal prism!
I am not sure if you remember when I mentioned the model sugarscape many months ago?
Anyway, if you do remember, you might not also remember I commented that one of the most haunting results of the sugarscape model was the realization that some of the sugar agents never moved on to the rich sugar mountains. In effect, the agents were to stay poor forever.
When the Brookings Institute team asked "why?", they discovered (perhaps predictibly?) that these poor sugar agents had exceptionally efficient metabolisms (so could live in the arid lands) but incredibly poot eyesight.
This meant that despite living right next to incredibly rich sugar mountains, the poor sugar agents couldn't see the mountains therefore never moved off their poor lands on to rich lands instead... never.
But if you think thru the model, and think of the more general isuue of all information, depending on what you are talking about, all of us face this same problem. You see things I clearly cannot, and vice versa. It is just a fundamental problem of information and frame of reference itself.
Yet the truth of this fundamental information problem is an entirely different thing than trust, integrity and faith in each other.
Why do you want to impart a sinister interpretation towards Hell's motivation to change his subtitle?
Thai, A fuller response later. Nothing sinister except in the eye of the times. Mostly trying to bait Hell out of his SAD time?
ReplyDeleteI agree we are on the outer parabolic reaches of the galaxy now, the time is ripe for idiots and sinister characters.
Is history a function of random events in time or the force of individual will? I argue both--and the force of will in this time is rotten.
Hi folks! Welcome to the thai, greenie, thai, goldie, greenie, thai blog spot! Keep on trollin' baby. Wot a drag.
ReplyDeleteSo when is your next update Hellasious?...
ReplyDeleteAfter reading your articles I think the US economy is completely hopeless. Americans are heading for financial hell.
This reminds me of the final episode of the Sopranos
ReplyDeleteHell got laid off from his PE fund and is looking for jobs.
ReplyDeleteI think we ought to pass the hat around, take up a collection and order some flowers for Hellasious funeral--you think? 'Cause this spot is D-E-A-D.
ReplyDeleteIs the U.S. Economy Safe?
ReplyDeleteYou know, with the lack of activity here, I might have to start writing on my own blog, again.
Okielawyer,
ReplyDeleteYou could always hang out at London Banker instead. Unlike Hellasious, he's actually blogging.
londonbanker.blogspot.com
I just saw Thai there.
Miss your fantastic analysis Hellasious.. We all know that things are unfolding just the way you predicted, but it just isn't the same without the jaw dropping charts and graphs that we have come to love on this blog. I know I'm not the only one that waits to hear your play by play, please please if you can, give us a chart now and then!!
ReplyDeleteThanks so much!
JP, that is a wonderful idea!
ReplyDeleteHell, if you are bored blogging for the time being, how about you come 'hang' at the London Banker Saloon with the rest of us?
That way you can still participate, without having to feel like you always have to play 'host'.
As I know only too well, sometimes it is a lot more fun being an employee than being an owner. You can change your frame of reference for awhile ;-)
Dink, I hope to see you as well (yoyomo is already there)
jp:
ReplyDeleteWho do you think told Thai about London Banker? (hint, hint)
I just haven't posted there yet.
Okielawyer,
ReplyDeleteYou could also always post articles on your own blog and add "color commentary" like Jesse does.
jessescrossroadscafe.blogspot.com
I don't think this particular blog is coming back to life until fall at the earliest, maybe never.
So I've been out wandering in the desert (metaphorically) trying to synthesize a lot of data and theories to hopefully get a less uncertain belief on the future of humanity (I'll return to this later).
ReplyDeleteFirst, there will be ranting about some of the posts here that I've missed or read too quickly.
*Hell, take your time playing in the sunshine until the Muse returns with inspiration. Please note that you do not have to limit yourself strictly to financial matters as your readers have wide interests.
*Anonymous- STFU
*LuckySingaporean, the cheerleader has thrown down the pom-poms and is angst-riddenly smoking under the bleachers. The game is not going well, eh?
* Okie, nice article. I don't understand Level 3 assets and they seem to make up an incomprehensible amount of money.
*re: Mish- I've been lurking there, but the poster are hard-core goldbugs and frequently seem to discuss guns. I'll try this London Banker thing (along WITH Sudden Debt).
Yoyomo- I read some of Long Emergency as you recommended. Puts this whole Georgia v. Putin thing in an interesting light.
Greenie- Why must you be so loathesome? Perhaps if you, Putin, and Cheney all donate your brains to science we can identify the problem and cure it.
Marcus- a lattice of individual will and uncontrollable events. Like nature and nuture.
Thai- I just saw that like to the BPD article. Its stuff like this that gets me wandering into the metaphorical desert trying to reconstruct my beliefs. If we can identify rogue psyches and fix them maybe the good people can stop wasting all their time combating the bad guys so they can get some work done fixing the planet, curing disease, and building colonies in space.
Back to the desert to synthesize.
Dink, a bit long, sorry.
ReplyDeleteI 'think' I understand where you are; your words sure sound like a place and time I remember once being in years ago...
While I can't share anything 'useful' (at least in any practical sense of the world) with you about your fears, still if you do not mind, I will share my own journey to see if seeing things from my frame of reference, also gives you the same 'comfort' it gave me.
First, understand you do not need to apply more logic to the problem of this ‘fear’ you have (it is precisely here where yoyomo and I seem at our farthest). You do not need to look outside to seek 'safety' or an answer. You already have all the logic you need; you already know all you need to know.
Think of your mind as a computer at the cusp of its own self awareness (work with me for a moment). The think about your mind… You seem to enjoy ‘psychology’, perhaps this 'story' from NPR will help you think about things (please listen to the audiocast or you will miss the beauty of the story).
In your mind, there is no central 'dink' to who you are. No matter how much you try to find it, you will not find anything that is ‘more’ dink than anything else. All the cells of your brain just seem to 'cooperate', it is that simple... Now you might be fooled for a moment into believing they all cooperate because they are close of each other- they all share the same DNA. But what is cancer then? Just think about it… I am ‘sharing’ with you, that if you go down that rabbit hole (go ahead if you want), you will find it too has no end and clones sharing identical DNA is not the 'complete' answer.
Now think of the world/universe as nothing but infinite information and your brain as a processor of that information. Do you see the fractal yet? Do you see how we live in a fractal world/fractal universe? Again, to remind you, a fractal is something that is 'self similar' (Google it if you are unsure). The more you 'fracture it', the more it is the same.
The reason I say this is that by definition, the risk to humanity is the same as it has always been, is the same as it will always be. The very network we are talking over, the society we all live in, our bodies, all of nature, the economy, geography, even the 'chaos' or 'randomness', etc... are all fractal. The fact that you see danger now from your particular frame of reference does not change this one bit. In fact, I would argue it increases your responsibility to cooperate and have faith in your fellow (wo)man, since now you see the ‘danger’ in things, where your fellow (wo)man may not as they look at information differently. It does not mean they do not care about you, and vice versa.
As I don't really know anything about you accept for what you post, and I make my own ‘inferences’ on what you mean based on my own frame of reference, I wonder if the following will help:
IF I remember correctly, you once said you chose the blog name of Dink from a character in a novel by Orson Scott Card called Ender's game, is that correct?
If my memory also serves me correctly (it has been a long time since I read that novel), Ender’s Game was a novel about a war between humans and an alien race. And the great 'irony' of the novel’s war was it never needed to happen. It occurred ONLY because the two races could not communicate with each other. Or to be more specific, their minds processed information differently. But once this ‘truth’ was realized, they decided to have 'faith' in each other and 'cooperated'. (As an FYI, this issue suddenly reminds me of why I always have a problem with people eating Octopi (even though I eat meat), a WAY intelligent animal that evolved who’s non-mammalian intelligence evolved from a branch of our common ancestors an incredibly long time ago… somehow just seems wrong to destroy it).
Anyway, the problem in the book was really just a frame of reference problem. And while I realize this is not a ‘real’ example, the point is still the same. (Did you know that thousands of people took to the streets when Sherlock Holmes was killed, so powerful was the ‘reality’ of his character to many Britons… think about it).
There is really just a choice between cooperate and not cooperate, and nothing else. And while you can try to spend forever trying to see if there is a way you can ‘game this’, you can’t.
Just like the CDO products Hell taught us about months ago, where the underlying moral hazard risk involved in the original credit transaction was ALWAYS inherent within the structure of the CDO, and could never be eliminated no matter how hard the bankers tried, so too in the infinite fractal of information can the risk of cooperate vs. not cooperate be eliminated. The risk is always there. ALWAYS.
Remember, if a cluster of information wants to 'manipulate' other information 'in order to make it useful”, the best way to do it is to cooperate with another cluster of information. It is that simple.
But for cooperation to occur, the first and second cluster of information needs to have 'trust' or ‘faith’ (or whatever else you want to call it) in each other (or they won’t cooperate). It is a choice; it is as simple as that.
Of course the alternative is for the two clusters of information to not trust each other and not cooperate— but they will not benefit from cooperation either.
It is a choice, cooperation or non-cooperation where the benefit is exactly balanced by the risk.
Now think of this fundamental fact, and again think about the universe of infinite information.
The risk never goes away, no matter how ‘high’ or low you are on the information food chain. The risk remains constant… Or as complexity scientists like to say, no matter how ‘complex’ the information structures become, their risk of disruption is constant.
I won’t go into it here, but it is the same thing as the conservation of energy (you have heard of that law?), it is also know as the law of the conservation of risk.
Have you ever really thought about what the law of the conservation of energy means? What it implies?
Now think on the following last issue… Why have scientists found a part of the brain responsible for ‘faith’ or religion or god? Google it if you don't believe me... better yet, as an FYI, look up how certain drugs (like mescaline, or psilocybin affect this region if you still don’t believe me).
Just look around you, you will be stunned by the fractals... Lift up your hand and look at it, I mean it, really look at it it is right there in front of you…
You are not at any more risk today than you once were. The universe/world is self similar. The risk is constant and infinite.
Nothing is happening today that should change your fear of the world. But it is your choice.
I make mine, you make yours. And by the way, there is nothing ‘useful’ about what I have just said. I understand this. Your risk remains the same whether you cooperate or not (this is the classic fallacy most religious prosthelitizer seem to fail to comprehend).
It is your choice. We will all die, that is a given. If you are willing to ‘trust’ me on anything, trust me on that (I see a lot of death, and I mean a lot).
You can’t ‘game’ the system, no matter how hard you try. Life is random. fractals are everywhere, and trust and cooperation are a choice. But I can say, the higher the complexity of the information structure, the more trust there is. It seems to me if you want to see these information structure, trust and faith and cooperation is all you have.
But your risk today is not greater than it was yesterday, nor will it be greater tomorrow.
We live in a fractal world
Open your mind
Thai,
ReplyDeleteFYI re. octopi; once they mate the males go into a stupor and can't defend themselves and are ripped apart alive by the fish one mouthful at a time starting at the tentacle tips and working their way toward the head, the females go into their stupor and suffer the same fate a few months later after the eggs have hatched. As long as they are killed ethically, you do them a favor by catching and eating them and so saving them from a worse fate. True, you deny them the chance of reproducing but each female produces 40-200K eggs so you don't need many to sustain a population. BTW they have a very short life-span (1yr or less for most species, longer for the PNW giant octopus which generally isn't eaten).
Anyhoo,
I've never tried LSD but if it'll take me where you reign I might be tempted. You should have been a Baptist preacher, your zeal for converts is truly inspiring.
yoyomo- sorry, I am not trying to convert you. I would have personally emailed Dink to avoid the public posting but I don't have his email address.
ReplyDeleteHe said he was in 'fear', it was an offer of 'help', (I am a physician, remember?) that is all.
Move on
Moving On, but no offense was intended. I find your enthusiasm rather endearing.
ReplyDeleteYoyomo,
ReplyDeleteSo I open the paper today and what is the first article I see.
Life is random ;-)
All pity will be accepted :)
ReplyDeleteI am curious about this fractal thang, but can't seem to make the leap from simple equation reiterating itself in interesting patterns to human thought. I can link it to a genetic cascade resulting in evolution, but once consciousness comes in to play I get wrapped around the axle(s).
I'm heading out on a camping trip (no metaphor; an actual RV by a river) now, but will try to open my mind further.
Have a great weekend, Thai and Yoyomo. Try not to fight too much( and also try to keep Greenie in line in my absence).
Thank Goodness you're still talking to me Thai. I saw an episode on Nova (I think) a few years ago where they showed an octopus unscrewing a jar to get the crab inside so I don't doubt their IQ. My point simply was they live short lives that end brutally so being caught by a fisherman isn't on the level of tragedy as killing a whale.
ReplyDeleteBTW, did you see the story a few months ago about the whale that was killed and when it was being butchered a harpoon from the 1870's was found embedded in its shoulder bone. It had lived for 130yrs after its first escape from death only to meet the same fate more than a century later. Reminds me of Appointment in Samarra.
Dink,
Enjoy your trip but please be safe on the water, I had a dear friend who drowned on a whitewater rafting trip. That sad episode also had shades of Appointment in Samarra as my friend had narrowly escaped death when he was hit by a drunk truck driver a couple years prior but death delayed would not be denied.
yoyomo,
ReplyDeleteI have never been 'upset' for even a moment. You just seem to keep missing my point about trust and faith in each other-- which as far as I am concerned is the only real source of wealth that exists.
This entire credit crunch is nothing but a global loss of trust. The 'bubble' lasted far longer than 'good people' like Hell would have ever predicted (people kept the faith). Yet they were warning us for years and few listened.
Then one day people finally started 'losing faith in each other' and began seeing nefarious shadows everywhere, even though nothing fundamentally changed.
And if things get real ugly somewhere, it will be because that place more than any, lost trust the most.
I have to disagree Thai, something very fundamental changed; people started defaulting in large numbers and the cash flow dried up so that the fraudulent illusion of solvency was no longer able to be maintained. The kids' marble example had no service-payment stream attached to the marbles.
ReplyDeleteThai:
ReplyDeleteThen one day people finally started 'losing faith in each other'
Yes, for good reason. The bubble in housing was based on fraud. People gave trust when it wasn't warranted. Your statement implied that if they had just "kept the faith" that everything would have been alright. There are some people don't deserve to be trusted.
I agree with Yoyomo, for the most part. Something fundamentally changed: people started to realize that they were being defrauded. Yet, in many instances, they were powerless to do anything about it. Others did have some remedies ("walk away" as in some California homes); still others had to go the bankruptcy route which destroyed lenders "faith" in their ability to repay and prevents them from borrowing, or makes it far more expensive.
So, Thai, how would you restore trust? The Devil is in the details, you know.
Regarding the Credit Crisis for Kindergarteners, this is closer to the truth.
ReplyDeleteThe way Jesse frames the issue; I see what is causing him to lose trust... And I am not at all saying 'keep the faith' at all costs and everything will be all right (in fact I am saying something far harsher in order for people to ‘keep faith’).
ReplyDeletewhile I agree with you that some fraud is the problem, I don’t agree with his (or your) solution to this problem
As I look at what is being written, you have paradox (just as I think I may be suggesting a paradox to you from your point of view). By the way, as I am sure you have realized, I am comfortable with paradox ;-)
Let me illustrate what I mean
Okie and Jesse’s first paradox from Thai’s point of view (let’s call it paradox 1).
Paradox 1:
You suggest issues of fraud and moral hazard in the lending industry can be solved by:
1. Creating more layers of process or government oversight, etc...
2. SOME of the people who committed the fraud are in the government
IF I understand you correctly (and I readily admit I may not), your solution for paradox 1 seems to be
1. Create more government oversight of the process
2. Get rid of the crooks in government so more process can move smoothly
But I see paradox 1 as a paradox because when I hear the word “moral hazard”, I immediately realize that moral hazard ALWAYS goes two ways. Only the reason we called it ‘moral hazard’ and therefore think of it as ‘asymmetric risk’ is because the other side of the Moral Hazard has been ‘pushed’ somewhere else in the system. It does not appear in the problem being framed.
But my ‘reality’ tells me it there, you just ‘covered it up’ or ‘moved it off the books so to speak’… kind of like an SIV (does this make sense?). And from this standpoint, no amount of process or government can solve an issue of moral hazard. If a part of a process is built on human ‘fallibility’, no matter how big that process gets, the human fallibility will still always be present in that system or process. The risk never goes away.
I therefore suggest the following solution (really Plato did)
1. Focus on the integrity of the individual
2. If the integrity is in question significantly, throw the person out of the system, but don’t change the system.
3. The ‘bad apple’ should not be part of the ‘kin’ boundary anymore.
Have you ever thought what ‘reputation’ really is, and especially how it operates within an evolutionary system? (Does this make sense?)
Paradox 2:
You suggest that taxing corporations more will help solve issues of trust with the ‘middle class’ since they have been getting away with fraud
The paradox from Thai’s perspective:
1. Companies are not people
2. People have been using companies to shield their own bad actions
3. Companies are easy to destroy and reform
4. A new company can still have the ‘bad people’ in it
5. By not PERMANENTLY destroying the reputation of bad people, but instead focusing on the ‘companies’, not only do we get a waste of energy but the bad guy won- they used their ‘shield’ to get away with their criminal behavior and to do it again— the get to go on and build company after company
Paradox 3
You suggest that the ‘bubble’ was created by fraud and that going after (this is where I am a little unclear… EVERY rich person? Everyone in Wall Street? Every ‘company’ in America (and forget the people)? And I am not even sure how this will help trust—is a ‘pound of flesh’ issue on anyone, anything more financially successful than some median? But what about rich people who were warning everyone about this issue? They are out there?
Who committed the fraud?
SOME rich bankers and mortgage brokers and financial ‘innovators’ on Wall Street- YES
SOME poor person who was looking to make a quick buck- YES
Actually, I would be interested to know the ratios of homeowners who committed fraud to the ratio of financial service worker who committed fraud
And what about the people who were ‘naive’ but didn’t actually commit fraud. They joined in the bubble. Should people who had nothing to do with the bubble in any way (renters?) be required pay up?
Paradox 4
A ‘core value’ of Justice or Better that ten guilty persons escape than that one innocent suffer.
--English jurist William Blackstone
1. But justice at what cost?
2. Whose justice?
3. Does one injustice supersede another injustice?
4. Who chooses this hierarchy of injustices?
a. Is it a ‘judge’? What about his/her integrity?
5. What about when one justice conflicts with another?
Thai’s perspective the paradox is where is: where do we ‘draw the line’
1. OK, but what about 11 guilty people free per 1 innocent? Or 100 guilty free to prevent 1 innocent convicted?
2. The same logic is applied to everyone
These are all ‘boundary issues’
So to answer your question “how would you restore trust?”
Focus on punishing ‘bad people’, no matter how ‘high’ or ‘low’ they are in the system—all of them are destroying trust. And while it might be better that 10 guilty go free so 1 innocent is not lost, I might not agree the number should be 50 either.
‘low’ does not get any more of a free pass than ‘high’, just because of status ‘low’
And people should have their reputations follow them around.
But one last thing... when you do punish 'the crooked', remember that whatever system you use to punish crooks also has fundamental problems with moral hazard within its system.
ReplyDeleteIt is what it is
The alternative is chaos
Thai,
ReplyDeleteNo one would disagree (at least publicly) that the corrupt, whether hi or lo, should be punished but that doesn't negate the fact that some systems are more susceptible (usually by design) to fraud and abuse. There was far less abuse in business back in the 70's than there is now. There may have been individual cases of wrong doing but it was never systemically pervasive. Either people were inherently more angelic (doubtful) or the safeguards built into the system were purposely dismantled since then for the benefit of a targeted group of beneficiaries.
Thai:
ReplyDeleteFor all your writing, you never answered my question. You never stated what process you would use to punish only those who have done wrong. Details please.
What, are you running for public office? You spoke in generalities and you shot barbs at me, but you never gave any specifics of how you would implement your idea of only punishing bad people.
How would you resolve your "paradox?"
And for the record, I have answered yours.
Allow more cases where the Court can pierce the corporate veil.
Expand products liability to include financial instruments that we have discussed on this board extensively.
I truly apologize: What barbs?
ReplyDeleteI think tracking reputation will work. The old adage: "who will watch the watchers" remains, but this is nothing new. Who tracks the reputation, that is a whole can of worms. But it is clear that is what our ancestors on the savannah did for millions of years.
We do it right now with ebay buyers and sellers (and interestingly, the buyers-who have more power in the relationship, are pushing back and demanding their reputation NOT be tracked-- and they often have a good reason).
I do like you idea of piercing the orporate veil.
But I have one question?
If you 'pierce' the veil and learn there is nothing bad going on, that there are no 'bad people'-- who pays for that?
Does the plantiff's lawyer pay for it? Does the plantif? Does society? Dose the company just have to 'eat it'?
If you keep the 'cost' at the point of 'piercing' (i.e the plantiff's lawyer or the plantiff) so that everyone can see the bidirectional moral issue (and therefore not create an asymetric moral hazard issue), I am in favor of the idea.
But if you push the bidirectional moral issue onto someone else thereby create an 'asymetric risk' moral hazard issue (say taxpayors or the 'good people' in the company, etc...) then I am not.
As the cost of a 'bad piercing' will be born by someone else.
Otherwise we agree
The same issue applies with product liability.
Thai:
ReplyDeleteThere is never a piercing of the corporate veil until after there is a judicial finding that wrongdoing has taken place.
The plaintiff already has the burden of proof.
Can you help me to understand the implications of what you mean?
ReplyDeleteOh, I think I see... took me a moment (sorry). You mean once proof of wrongdoing has been determined in court, the court allows the plantiff to go after the individual for certain extreme things?
ReplyDeleteThis is no different than what I currently face with my professional liability. Your proposal seems reasonable enough to me. I would be thrilled to see a similar standard of professionalism placed on other people.
Yet I still think that in order to get larger 'buy in', you change the payment structure of courts to a form of 'lose pays everything', as I understand exists (?incorrectly) in Briton.
Watching late night adds where law firms 'trawl' for class action plantiffs just gives too much of an appearance of moral hazard to the system, at least from the point of view of someone fearing a law suit.
I am well aware of this issue from discussions with my colleagues; physicians too are 'losing faith' in the system and this is one of their biggest complaints (In truth I am not so sure frivoulous lawsuits are as big an issue as physicians make them out to be, but they do destroy trust).
Thai:
ReplyDeleteYet I still think that in order to get larger 'buy in', you change the payment structure of courts to a form of 'lose pays everything', as I understand exists (?incorrectly) in Briton.
No, I am not advocating the British system. Stripping a corporation of its corporate veil is in no way related to the "loser pays" rule. Most of the legal theories involved in stripping a corporation of its legal status involves suits in tort, which almost never have the "loser pays" rule in effect.
Watching late night adds where law firms 'trawl' for class action plantiffs just gives too much of an appearance of moral hazard to the system, at least from the point of view of someone fearing a law suit.
Let me give you an example of why these kinds of ads are sometimes necessary. Credit card companies have been known to "hold" a payment made (on time) until it becomes "late." Customer is then charged $49 late fee. Sometimes this results in their being over their limit whereby they are charged another $49. Customer goes to see attorney. "I was wrongly charged fees," they tell the attorney. "Sorry, it's not worth suing over," the attorney tells them back. "There is not enough money involved to file a lawsuit."
However, attorney finds out that this practice is done in 1 out of 10,000 customers of the financial institution. Let's say the financial institution has 10 million customers. That comes to 1000 customers per month charged $100 wrongly (+ interest now computed @ 30% compounded daily making it effectively 35% APY -- and, as a side note, this 35% APY applies to their entire balance, not just the $100), meaning that the financial institution's profit margin has been unjustly increased by $1.2 million per year + 35% interest on the entire balance of all those 1000 customers.
It is unlikely that each of these 1-in-10,000 people know each other. And since each of them has been cheated out of a little more than $100, for each one of them, it is not worth suing over $100 (the legal fees would be more than that). So, unless you can find a way to bring them all together in one lawsuit, it will never be economically viable to sue.
This happens a lot more than you realize. And it's not just in the credit card industry.
So, other than advertising, how should a lawyer find all these people?
I am well aware of this issue from discussions with my colleagues; physicians too are 'losing faith' in the system and this is one of their biggest complaints (In truth I am not so sure frivolous lawsuits are as big an issue as physicians make them out to be, but they do destroy trust).
Medical malpractice lawsuits add no more than 1% to 2% to the cost of medical services. (Does you medical malpractice insurance cost amount to, say, 3% of your salary, accounting for a profit for the insurer?) Insurance companies are just scamming you. They are doing the same thing to you as the credit card example above. You are just too dispersed to fight back.
Back from camping in Wenatchee (sort of the San Joaquin valley of WA)where I saw rivers flowing with apparently abundant and clean water, fields collecting photons and transforming them into things I can eat, and people exhibiting trust in eachother and self-management in themselves. So I'm in a good mood, but do appreciate the sharing of metaphorical journeys that you gave.
ReplyDeleteSo I 100% agree we're all a bundle of neurons processing information and that perception is reality. Here's some camping synthesis:
Genes just wanted to be replicated and the individual temporary carriers weren't of great concern. But the genes kept adding on features to the carriers and one day these features resulted consciousness. It was okay at first; it made the carriers better survivors for more replication and the hormones still created emotions which drove the carriers in the right direction anyway. But the carriers' consciousness was forming complex patterns far beyond their original purpose. This led to a carrier's revolution (thanks for the pleasure hormones, but I'll use birth control). Betrayal! The carriers living for their own purposes instead of the gene's purposes. Well, sort of. There are 6B humans who are all in different stages of feeling/logic ratios. Many still driven to goals they haven't questioned using methods they haven't questioned. Each of these "equations" (strategy, personality) processing the information differently and behaving accordingly (iteration).
Okay, so help me break through here. I perceive fractals to be clear, logical, understandable. They look complex, but once you understand the base equation you see the logic and simplicity. We
6B have sloppy base equations that keep changing. I don't see understandable fractal patterns emerging; I see tangled mess. Perhaps my processor needs upgrading.
Thoughts on fraud: Perhaps these people are committing fraud against themselves. They actually believe they'll make good on their promises because they haven't thought their obligations through or have sufficient (or correct) data. Some of the most irresponsible people I've ever met have no idea what they don't know (and wouldn't believe you if you told them). If fact, they're obnoxiously self-confident. The stereotypical teenager is the perfect example ("I won't get addicted", "having a kid won't be that much work", etc.).
Dink said "Some of the most irresponsible people I've ever met have no idea what they don't know (and wouldn't believe you if you told them). If fact, they're obnoxiously self-confident."
ReplyDeleteThis statement applies just as much to me and you as it does to 'those people'.
The fact you see a different information structure does not even make yours a larger information structure (though it could be).
While perception is 'reality' to your consciousness, true reality is much much more than what your consciousness contains (all of us are cursed with the problem:
'I don't know what I don't know').
Let me help you see fractals everywhere a little better.
Take the analogy of building larger structure by using some kind of 'building block' (when you hear the word 'building block' you should realize there is a fractal).
One makes larger structure by reiteratively combining the building blocks over and over in different ways untill they reach a a 'boundary'.
Example: The cell is the 'basic building block' of life.
If you apply a reiterative pattern to that building block (the cell), you get all the 'structures' we can literally see with our own two eyes in nature-- plants, animals, etc...
Again we simply reiterate the basic building block in different ways and let them grow towards a 'boundary'.
Think how physical compounds are made of the 'building blocks' of atoms (mixed in different iterative patterns), yet atoms themselves are made of smaller 'building blocks', etc...
Or you can change the boundary issues for a particular building block and then reiterate that new building block. So a cell with different boundaries becomes a 'specialized cell' such as a neuron. Reiteratively combining neurons and you get a nervous system; reiteratively combine this and you get the brain.
But it continues, the brain itself has reiterated structures creating a 'higher' and 'lower' brain itself (just look at a google image of a brain dissection if you were not aware).
Or think of how the brain works as a computer. Shift your point of view to 'information'. For the brain to 'store information, it creates representations of that information (we call these objects in computer science) and then we just reiterate these objects over and over in different ways until we come up with a 'useful' structure. We reiterate this structure to get higher structures yet again.
Or think about society: If each individual in society is a 'building block' of that society, if we reiteratively organize these people in different ways we get different societies, etc...
All these reiterations of basic building blocks continue until they reach boundaries they cannot pierce.
So as just one example (the world) the fundamental boundary might be all the usable energy on the planet + the energy which enters our planetary system from outside (which we tend to see as the sun, not really knowing for sure if there are other energies hitting our planet that we are simply unaware of).
And one interesting 'observation' of a bounded fractal system...
Take the analogy of a 'three dimensional planet', once you have defined the boundaries of your system (the planet), all points of view looking at the system are actually necessary to maintain the integrity of the boundary itself.
Left is not more or less necessary than right. Same with up vs. down or any permutation of the above.
So for a hypothetical two dimensional society, to maintain the integrity of the boundaries of the society, 'left' is just as necessary as 'right'. One cannot exist without the other.
But of course, society has a lot more than two boundaries (though I am sure 'fundamentalists'-- people who can only look from their own frame of reference or point of view) would try to collapse the system to a never ending 'war' between themselves and 'the other side'. Any attempt to tell them you are looking 'up' or 'down' on them is perceived as heresy.
Go 'surf' the internet a little and you will see what I mean... People's comments clearly 'bare this out' (the prison of our own mind).
And I really recommend you go surf, where you would otherwise NEVER surf, places where some points of view are completely beyond your reality. Of course, since you can't see things from their point of view, you have no way of knowing if 'it really does make sense' or whether they truly are 'crazy'.
At some level you just have to trust it or reject it.
Again, we just think we understand the boundaries of our world because that is all we understand, but 'reality' tells us those boundaries are far greater than we understand.
But again,
I reiterate, there is nothing 'practical' or 'useful' about this knowledge (well, I guess it could help you 'organize' a creative process for those in a one dimensional world), but other than that, the only other thing I see it 'practical' for is that it can calm a 'fear' from a disruption one has in the boundaries of the world they thought they understood.
The odds have always been against us, why fear it more now?
So a few 'fractal' predictions:
More complex intelligence will likely be generated from building blocks of a basic unit of intelligence...
More complex cooperation will likely be generated from basic ways to cooperate...
More complex ways to kill ourselves will be generated from basic ways to kill ourselves...
And the underlying 'risk' or 'problem' in the basic building block of the complex system will always remain and 'scale' with the complex systems size...
Basic 'inequality' will always scale with the system. Wealth will always be a 'fractal': and I mean wealth in every possible way it can be used.
http://www.boingboing.net/2006/03/28/howto-make-a-fractal.html
If you love the boundaries of your system, your opposite is also your best friend. Evil definitely needs good in a fractal world.
It is what it is
Think about it
(Hell is going to start requesting urine samples with posts like this)
ReplyDeleteBasic block to complex structure(
Atoms(no quantum physics #$%^@)>molecules>proteins>cells): good to go. Pretty straightforward boundaries.
Stem cell to specialized cell still simple enough. But if an entity were conscious that it was a neuron structure and that it had the ability to volitionally restructure itself...couldn't it "game" the boundaries? It seems this particular set of code (to be curious, inspect logically, and install; learn; differentiate-select-adapt)is....good.
My mind just stalled, but when it starts again I'll ponder constructs and boundaries again.
"Oh Benson, dear Benson, you are so mercifully free of the ravages of intelligence." -Time Bandits
I am quite confident I will pass any test ;-)
ReplyDeleteIf you think about all of quantum mechanics (QM), it is really just probabilities of cooperation applied to quantum or 'building blocks' with the single additional observation that the speed of light is always constant.
As the scientists looked at smaller 'building blocks', they had to start to make even smaller building blocks, like quarks, etc... to explain the original building blocks they found. And each time they found these smaller building blocks, they then realized that not all of these building blocks cooperated with each other, so they had to figure out whether a particular building block 'cooperated' or not; coming up for wonderful names for this cooperation like charm, up, down, strange and bottom, etc...
Then when they realized this had yet further building blocks, they came up with string theory, but realized even here too cooperation was an issue so they had to again give names to the cooperation permutations, etc...
Even 'ideas' like space or time (or their combined "space-time" and the building blocks were combined) came to be recognized as built from yet smaller building blocks: 'bubbles', etc...
The idea of 'information' itself had to become quantized into smaller building blocks (remember that old favorite of classical quantum mechanics, the Heisenberg uncertainty principle?). And yet these building blocks were in turn built from smaller building blocks, etc... No joke
All with the fundamental binary choice of 'cooperate' or 'not cooperate' (again, the physicists geve this cooperation many wonderful different names).
Check my explanation with someone who understands QM theory well.
Also: "Stem cell to specialized cell still simple enough. But if an entity were conscious that it was a neuron structure and that it had the ability to volitionally restructure itself...couldn't it "game" the boundaries? It seems this particular set of code (to be curious, inspect logically, and install; learn; differentiate-select-adapt)is....good."
ReplyDeleteRemember, fundamentally evolution is a red queen game. But in the short term, the answer is 'yes'- 'but'... depending on what you are talking about, the neurons with self awareness could 'game the system' for a little while in the sense that they get ahead at the expense of other parts of the system (this might be akin to your brain 'divorcing' itself from the limitations of a 'biological' body-- say 'evolving' bionics, etc...)
But... it those neurons better be sure when they do 'go rogue' that it is really going to work out or the change will just 'kills itself'. Example: bionics get infected and there is no additional immune system changes to handle the new problem of infection in the setting of a foreign body, which is a VERY BAD infection to have, etc...
But more often than not, some silly neuron 'thinks' it is 'wise enough' to morph into a brain cancer and live forever, only to learn that the cancer killed the whole organism and with that killed itself.
This is the primary reason successful evolutionary changes are so rare (about 1 in a billion changes work according to data I have read), because the changes were dependent on other boundary changes also being present.
Hell is definitely going to test our urine
:-)
(and if you somehow pass your test he'll demand a hair follicle follow-up)
ReplyDeleteQM and rogue neurons- true, in an attempt to game the system many a wiseguy adaptation has backfired. Consequences upon consequences...
So our minds construct models of the world. Minds evolved under specific boundaries with a definite affinity for sensory data from the eyes. To absorb a new concept its best try to visualize it; take the abstract and map it to an existing, similar concept via analogy. This may seem inefficient, but we work with what we have.(focus sputtering out; take up thought at later time).
So fractals obey rules; minds don't. Or if they do, I can't visualize it/integrate it to an existing concept yet. I'll keep on it. Semper Fi.
"A conclusion is simply the place where you got tired of thinking."
-unknown
I only recently realized that I'm missing this fascinting exchange.
ReplyDeleteI guess this is what happens when bloggers go on summer vacation and the commenters don't.
Somehow the conversation went from monster.com to a branch of metaphysics.
Thai says:
"Evil definitely needs good in a fractal world."
Just like people who want to troll blogs need blogs.
Dink says:
"Okay, so help me break through here. I perceive fractals to be clear, logical, understandable. They look complex, but once you understand the base equation you see the logic and simplicity. We
6B have sloppy base equations that keep changing. I don't see understandable fractal patterns emerging; I see tangled mess. Perhaps my processor needs upgrading."
Unless your fractal is, say, a 6 dimensional geometric configuration. Then it's not so simple.
Say for examle, a 6-dimensional Calabi-Yau manifold. Not simple at all.
I just think of human personalities as being the equivalent of extremely complex distinct geometric forms.
In my mind, your personality is your "fractal".
jp,
ReplyDelete"a 6-dimensional Calabi-Yau manifold".
Talk like this gets people burned on stakes;)
Glad to hear these musings interest you; always feel free to jump in. Hell has been patient with us pinballing off onto all sorts of tangents. I read "The Selfish Gene" a few years back; Thai seems to have been infected from mathematics. Interesting that these things seem to collide.
The scale of fractals (evolution, psychology, etc.)is stunning. One equation running amok through its iterations. One handy little DNA sequence comes together to form the first mitochondria and now look where we are. One clever person gets an idea for compound interest and now look where we are.
I like your statement that your personality is your fractal. Think of the cascade of events that result from that fractal. And that we can monkey around with the fractal and a different cascade will result.
wheelchairs
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