Financial topics

[Higgenbotham]

Ray Kurzweil: How Do You Define Intelligence?
http://www.youtube.com/watch?v=bcJTQMIgsm0
Ray Kurzweil: "Intelligence is the abiity to solve problems with limited resources."

That's easy to understand at the hunter-gatherer level of complexity and in the talk he gives a related example.

How would we define intelligence in terms of today's complex human societal organization? What factors can be observed to determine whether the intelligence level of a human society is increasing or decreasing?

On an individual basis, the education system trains students to independently solve problems (or it used to), but once they leave that training environment and enter the real world the problem solving process becomes different because it is collaborative. Machines match wits with individual humans in contests of Jeopary or chess that replicate the education system testing environment and the human competitors are being outmatched. However, a human society doesn't work the same way as an individual contest due to the variability of individual brains and the ability of those individual brains to collaborate. If we were to model a computer versus human contest based on the way in which societies produce collective intelligence there might be several hundred collaborating computers playing against several hundred collaborating humans.

Likely the highest known and current level of intelligence in terms of human societal organization (or otherwise) is the collaboration of individuals taking part in innovation, problem solving and consensus decision making in a manner which is as unrestricted as practicable (see Hayek quote below). As that process takes place successfully, the complexity of a human society can increase and the intelligence level of a human society can also increase with that higher level of complexity. Though humans would like it to be so, the evolution of complexity has not historically occurred as a linear process. Getting back to Kurzweil's definition of intelligence, and quoting Joseph Tainter:

Complex societies are problem solving organizations, in which more parts, different kinds of parts, more social differentiation, more inequality, and more kinds of centralization and control emerge as circumstances require.

The Collapse of Complex Societies, page 37.

Four concepts discussed to this point can lead to an understanding of why complex societies collapse (in other words, plummet to a lower level of complexity, or collective intelligence - these words in parenthesis are not Tainter's). These concepts are:

1. human societies are problem-solving organizations;
2. sociopolitical systems require energy for their maintenance;
3. increased complexity carries with it increased costs per capita; and
4. investment of sociopolitical complexity as a problem-solving response often reaches a point of declining marginal returns.

The Collapse of Complex Societies, page 93.

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, "dizzy with success", to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

As societal complexity (and intelligence) increases, maintaining the status quo level of complexity requires investment, ongoing costs, and behavioral controls which have historically led to an eventual partial collapse of the gains in complexity - the proverbial two steps forward and one step back.

[aedens]

http://generationaldynamics.com/forum/v ... 253#p14253

Keep In context I am a Bull but we know that here. We must shift the observation to the socio economic calculation going forward.
Some of us have extended our self further than many can realize. It is time as it is written, to repose.

http://generationaldynamics.com/forum/v ... rder#p2765
H your comment measures many observations we noted as the division of labor to hopefully more.
The only hope first step forward is resolve the 1.7 trillion of hidden taxes which burden many
responsible groups. The nature of actual economy never changes or will it ever.

On the Social as we noted Neo-Marxist strategies of Antonio Gramsci an Italian Communist relying on gradualism, infiltration and the
dialectic process rather than a bloody revolution, Gramsci's transformational Marxism was so subtle that few even noticed.

[Higgenbotham]

Keep In context I am a Bull but we know that here. We must shift the observation to the socio economic calculation going forward.

Here's approximately what I think is happening. The 2008 stock market crash was a different sort of crash than what has been seen historically in the US because the real estate bubble got so large that its bursting spilled over to the rest of the economy. In other words, subprime was not contained when perhaps the reasonable historical expectation was that it would be. This I believe is why it took so many people by surprise, which is probably what has to happen for there to be a crash. The rebound out of the 2008 crash and 2009 low was also a different sort of rebound because the authorities used up all of the borrowing capacity of the US government to engineer that rebound. Now I believe July 2011 was sort of like September 1929. Once the US debt rating was downgraded, that triggered the August 2011 crash, which I think is most similar to October 1929. The rebound out of the August 2011 crash and October 2011 low lasted until April 2012. The rebound out of the October 1929 crash and November 1929 low lasted until April 1930. April 2012 was a higher high in the US, but April 1930 was not. However, in the rest of the world, April 2012 was a lower high. From the April 2012 high, the US stock market fell for 43 trading days, from April 2 to June 4. From the April 1930 high, the stock market fell for 47 trading days, from April 17 to June 25. From the June 1930 low, the stock market rebounded for 53 trading days before it began the steep descent to the July 1932 low, which was the worst part of the bear market. I believe we are entering that phase now. The fact the nobody believes that phase is being entered now is one important reason why it can happen, similar to how people believed subprime was contained and real estate prices would always go up. The belief now is QE to infinity will keep stock prices high.

[gerald]

Shipping is dead on the vine. It's as bad as it was during the first leg down. The second leg down is just about to get serious.

http://investmenttools.com/futures/bdi_ ... _index.htm

The idea that we aren't going to be "saved" is beginning to become a popular meme.

I was looking over an old book of mine that was published in 1906. The author gave the banks and financial institutions pure hell. A bit of updating and it would be popular today.

It sounds like an interesting book , could you post the title and author?
thanks

[aedens]

Keep In context I am a Bull but we know that here. We must shift the observation to the socio economic calculation going forward.

Here's approximately what I think is happening. The 2008 stock market crash was a different sort of crash than what has been seen historically in the US because the real estate bubble got so large that its bursting spilled over to the rest of the economy. In other words, subprime was not contained when perhaps the reasonable historical expectation was that it would be. This I believe is why it took so many people by surprise, which is probably what has to happen for there to be a crash. The rebound out of the 2008 crash and 2009 low was also a different sort of rebound because the authorities used up all of the borrowing capacity of the US government to engineer that rebound. Now I believe July 2011 was sort of like September 1929. Once the US debt rating was downgraded, that triggered the August 2011 crash, which I think is most similar to October 1929. The rebound out of the August 2011 crash and October 2011 low lasted until April 2012. The rebound out of the October 1929 crash and November 1929 low lasted until April 1930. April 2012 was a higher high in the US, but April 1930 was not. However, in the rest of the world, April 2012 was a lower high. From the April 2012 high, the US stock market fell for 43 trading days, from April 2 to June 4. From the April 1930 high, the stock market fell for 47 trading days, from April 17 to June 25. From the June 1930 low, the stock market rebounded for 53 trading days before it began the steep descent to the July 1932 low, which was the worst part of the bear market. I believe we are entering that phase now. The fact the nobody believes that phase is being entered now is one important reason why it can happen, similar to how people believed subprime was contained and real estate prices would always go up. The belief now is QE to infinity will keep stock prices high.

As we noted before the fiscal stimulus similarly can soften the blow of the recession but will not directly address the underlying problems. The customer is ruthless since he is the consumer as it should be. What I am saying is Volume and Volatility is what they need and not the market as such. Thus, it goes bust only when no one wants to play, when the market is flat and volumes shrink. This hasn't happened in a long, long time. The last time was the 1970's. They noted the low volume again today on the main scream media. The market is supported on printing expectations and the foolish actions of politicians. Any sane participant would regard this toxic brew as it is. The calculation going forward has not changed and as we have seen the debasement print will be bonuses and per capita as we collected from reality diminishes the ability to gain traction. Voice inflection of what the market is saying has not changed. I agree the seeds of the consumer destruction will be managed in the most regulated insanity we have even witnessed of scale. The per capita facts remain.

It must be clear by now that IPOs now occur when when MANAGEMENT want to cash out - simply put they are trying to maximize their gain; unlike the textbook role of markets to provide capital to new entrants to enable growth in a win-win relationship (that every underwriting broker will sell you), the IPO index clearly signals management's knowledge that 'it ain't getting any better than this' by the dismal reality of its performance. z/h

The market has another role and it is not you. The updraft is the implosion rate for now. This is not a clearing mechanism but an repression annihilation rate of design. The uber bulls are calling 1440, I do not know based on market fantasy on latency effect I warranted as the 17th. It may be safe to conclude two things we know already. Are we to be reminded again that 40 percent of earning is foreign based and consumer destruction we trend unabated.

http://www.cnbc.com/id/48578949

Details about a secretive government program to bail out money-market mutual funds are finally coming to light.
Acting without any explicit congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund "broke the buck" following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have prevented a panicked run by money-market fund investors. But until now the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program's duration.
Linus Wilson, an assistant professor of finance at the University of Louisiana at Lafayette, recently obtained data about the program from the Treasury, through a Freedom of Information Act request.

meanwhile: The Commission concludes that the shadow banking system was permitted to grow to rival the commercial banking system with inadequate supervision and regulation. That system was very fragile due to high leverage, short-term funding, risky assets, inadequate liquidity, and the lack of a federal backstop.

Lets get to point here, there is no market. Taxpayers have no government but red and blue shades of gray press simpletons supporting theft. They will take what ever they want and they cannot be voted out. I do remember the mandatory so called premium payment imposed or else. The moral hazzard is the market as conveyed and the socio economic calculation going forward. http://www.epi.org/page/-/old/webfeatur ... p44-47.pdf

The crisis reached seismic proportions in September 2008
Summer 2007: Disruptions in Funding

[Higgenbotham]

From the June 1930 low, the stock market rebounded for 53 trading days before it began the steep descent to the July 1932 low, which was the worst part of the bear market.

The uber bulls are calling 1440, I do not know based on market fantasy on latency effect I warranted as the 17th.

The 1930 model of 53 trading days from the June low(s) counts out to August 17, so I threw it up there, though I don't favor that model in this environment.

I don't necessarily favor a rally into op ex at this time (similar to how one did not occur after the all time high on October 9/11, 2007 which was the closing and intraday Tuesday/Thursday before op ex and the high this week was the intraday and closing Tuesday/Friday before op ex).

This short term delusion of the market is probaby a good place to establish shorts as the blow back from Fukushima and other effects are due to exert downward pressure and look to be already doing so. In the face of that the Fed may be irrelevant unless they want to risk hyperinflation, and they may, but I'll deal with that if it comes.

Looking at the charts from a purely mechanical/technical standpoint, 1440 looks achievable.
I agree with Charles Nenner when he stated on financialsense in a recent interview that while he didn't think 1400 would be seen, it would be a sell if it is seen. Perhaps luckily for me it has been seen and I can reestablish shorts at high prices and likely better risk to reward than at any point this year. I'd rather take action at 1400 when bulls are bellowing for 1440 than at 1100 when the bears are bellowing for lower prices (like last Fall).

[aedens]

I will look around that time as conveyed. I think the elements of cycles are more demanding than we all think. It reminds me of Job 38:35 Canst thou send lightnings, that they may go and say unto thee, Here we are? Today we can as we have just done with the Internet tonight. God asked Job 84 questions and he could not answer and it was not Jobs fault given the age of man condition's. Of the four people that gave him council they were related by blood to him and all the opinions to council Job was stone cold wrong. The point is there are conditions conveyed from his own family that were stone cold wrong. The point was attitude and conditions from the true Author. Nenner is a facinating person indeed and so is the day we live in. H, you are indeed a treasure in these days. Thanks

[aedens]

Pine away
http://www.reuters.com/article/2012/08/ ... 0T20120810
As we discussed no man status under common law. You as an individual have no claim. Serf in the realm
will not be skinned but drawn and quartered. The rule of law to property claim in and of currency are over.

We are as these people now.
An examination of corruption and class warfare in Brazil as told through the stories of a wealthy businessman, a plastic surgeon
who assists kidnapping victims and a politician whose income relies on a frog farm.
http://www.youtube.com/watch?v=SD0BGhgppdk
They steal because they know they will never be punished.
http://www.econlib.org/library/Enc/PropertyRights.html
http://library.mises.org/books/Ludwig%2 ... tality.pdf

As societal complexity (and intelligence) increases, maintaining the status quo level of complexity requires investment, ongoing costs, and behavioral controls which have historically led to an eventual partial collapse of the gains in complexity - the proverbial two steps forward and one step back.

I feel the Statist as we have seen will walk over as many bodies the minions are willing to produce for the burning avarice to secular utopians.
For those who feel the framers of the letter did not know this already you are the problem.
As I alluded to the Statist cannot even answer one question with out theft seen or unseen. Complexity is a writ to diffuse morals as Senaca warned.
http://generationaldynamics.com/forum/v ... rtue#p9252
OLD summed it the best :Bluntly, most people prefer to be irrational as often as possible. And most people love overreaction to everything, especially if they think they aren't paying for it.

[vincecate]

The belief now is QE to infinity will keep stock prices high.

If they print money fast enough they could well devalue the dollar fast enough that in nominal terms stock prices never go down. John does not seem to agree with me on this, but I really think that could happen. But if it does then gold and silver will have to go up fast. This is why I think if you want to bet on the stock market going down you should hedge that with a bet that gold and/or silver go up. So while my "silver up and S&P down" bet has not done well this past year, I still think it is a good bet.

[John]

Not a chance.