Business, as stupid

Moral: Wherein we look at what's behind a lot of what's called business: silliness. Why else the ca-pital-sino and all of the related crap? (note, please, I'm saying business; politics is another whole thing)

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The last man standing

What was that adage? By the 2nd grade (kindergarten?), we know all we need to know about people and life? Reading about Jamie's little rag (he? the epitome of banking - well paid, and such -- remember, last man standing) about his people (Jamie said that some of his people were running around like chickens in the time of the "whale" bit, worrying about their career more than what they ought to do to understand, and to resolve, the problem - has he looked at his ilk?) gets me to thinking about his type. Ah, CEOs? The WSJ, this weekend, said that we ought to honor them. Hah!

You know why that laugh? Well, there are people in the world who are effective. That is, they can do things and get things done. And, some of these make millions; millions of these slave away exploited by the CEO (and their ilk). Another type? Those who take (in one age, Vikings were the epitome in the European theater). That is, they dominate, have to be lording over someone, and such. Oh yes, they can order people around. Those who are the effective get things done; the order-around'ers take the credit (more times than not) and get the remuneration.

Now, we have those two sets of people. Doers (thank God for that) and manipulators (all types, essentially, exploiters of loopholes, skimmers off of the top, etc.). Now, there are other than these two sets (politicians, for one), but we'll just look at these two, for now (again, as this was addressed before, somewhat). The other sets will be looked at in time, as they relate to business, to boot.

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Engineers, for the most part, are doers (see Engineer Memes, for a laugh or two). Some become managers thereby moving out of the doer set (by the way, I heard a manager - about 15 years ago - bewail that he doing something for himself made him a doer - this about the time when secretaries were being let go and managers had to share those types of resources - but, this for another time). And, we have engineers put themselves through paces in order to become entitled to the role and its glory; then, we have them work for manipulators (but, that's the catch, engineers who rise to management become ineffectual).

So, we might say that it's the way of the world. Not necessarily, as I've run across several organizations in which the power roles were passed around. Those who were really effective tried to shy away from playing in the crap (used intentionally, as dirt is to be honored - it feeds you, for instance, by providing the means for food production - hydroponics' role is minuscule, comparatively, at least as of now).

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What's the point? It's a lead-in to chimera talking. Doers of the markets are those who are putting the technology into place, establishing the rules of the road, and managing activity. The takers, in this case? Most of the players.

We now hear that an exchange, of a newer variety, has been mis-handling trades for a few years. This came out via audit (we can look at this in more detail, but now we're just talking the generalities). Ignoring the particulars, one has to go back to look at why we think that these computational systems are doing things correctly. First of all, what is correct is not simple (as the guy who runs things says, but he didn't go far enough). Then, who the hell has determined that programming is easy and that we ought to take results from efforts of these people without question (oh, I know, the Zucks of the world just crap on us, and we keep silent since the system appears to be free)?

So, without belaboring the thing, let's look at what will be required. Along with oversight, we need to have quiescent points that will allow a look at things (even if it's time to do a quick capture of the state). This ought to be daily. Then, for any of these hotshot systems, with their automated trading, we need a computational watchdog(s). Ah, yes, none of the stupid dark pools, either.

Consider: Each trade would be handled, and verified, at the time of the event and scrutinized at the review point (several times). It would squelch speculation (yes, Minsky talked about the need).

Why this? There are serious computational problems that are being overlooked (read this and look at the Princeton FAQ). Rick Bookstaber of the SEC, at his blog, had a post (Great migration and barbarians) to which I responded, as follows:

The definition of the new barbarians would include those who can (via access, by ability, etc.) manipulate the game through knowledge that the underlying complexity will most likely shield their introduction of 'lemons' despite efforts by the "non-barbarians" to be vigilant and to prevent such gaming of the system. Evidently, it works. As in, where are the perp walks?  

See Princeton's FAQ on the subject of computational complexity and financial products: 

Computational Complexity and Information Asymmetry in Financial Products  

The net effect can be a huge pocket-picking of the multitude of the hapless by the very few.   

In this day and age, the takers have a new game, given to them by the technological advances of the doers. Isn't that the shites (love those Aussies)? This new thing (the glories of the cloud and more) have already been trashed by those who have been a pain in our collective butts throughout the whole history of mankind.

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So, back to the guy who runs the new exchange: why, guy, did you run off and sell your services as if they needed no scrutiny? Well, to make money, of course. The thing is that the game is now different due to computers (and advancements in the misuse of abstraction - we'll have to get back to this by extending our most popular post).

Business needs to take the role (hear me, Jamie?) in setting up a sustainable approach. Yes, and Ben, to boot, needs to bring his mind around to the reality.

Remarks:

11/24/2013 -- The ACM has a review article on algorithmic trading that everyone ought to read. Essentially, if we use a plane as an example (consider what Boeing has had to do to get the 787 out and about), we would say that the financial folks are putting passengers on experimental aircraft with little regard to their safety and comfort. The whole notion is atrocious. How does it happen? They've coached things in mathematics and computerese, plus they've bastardized Adam Smith's ideas. Where is our sandbox, and where is the stable economic system that we can build?

04/11/2013 -- See Alpha Seeking article.

01/20/2013 -- The recent Business Week had something interesting article (Steven Cohen, of SAC Capital). Some employed in the business have misgivings about their ways of doing things. One talker, under questioning, was asked if he knew of any hedge fund that was clean, or above reproach using the old concept (as in, no shady dealings). No, he said. They could not survive, otherwise. It's like doping.

01/18/2013 -- http://finance.yahoo.com/blogs/daily-ticker/america-declare-bankruptcy-doug-casey-124119100.html (easy debt mortgaging the future generations -- loose money, too, thanks, Ben). How many businesses,  like Hawker, were idiotic deals with loads of debt while some walked away with huge pockets?

01/17/2013 -- The Atlantic Article: What's Inside America's Banks? Using Wells Fargo as the focus.

01/16/2013 -- Consider this a ranting overview, the specifics can be addressed, more rationally, using material like Rick's post on his agent-based modeling work. Think of the agent view as analogous to the particle look in physics. What is at the basis of matter? Particle or wave? ... Why would we care from the viewpoint of business and busyness? ... Particles are individuals but could be compound. Think of the wave as representing the composite of the particles, in a sense (there are many other ways). So, talking about economic objects (particles), we have individuals, super individuals (companies, in other words), nations, and more. Some collection, like a bank (many employees (traders, et al), with a Jamie in pseudo-charge, as in, pretty-boy, front-man is a necessary role as we, the customers, want to know that our money is safe - so the pretty-boy can mouth comforting words to us), could be split into the particles, but then what would be the bank? It's a particle, itself, and a series of waves. But, one could, in certain views, use a wave as representing something meaningful. Like, is the principle direction vector pointing toward the mud (not necessarily kidding here - and say that it's a pig's wallow full of it) so that we all get splattered with crap? ... Our problem? The descent (as we've all felt and seen) is due to a lowering all around as these particles followed their own thing without any due thought to the flock (ah, how can we teach such a thing? -- if I'm a John Galt, to which flock do I belong?).

Modified: 11/24/2013

Systemic risk

Moral: Wherein we continue the Quants series.

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We're not picking on these lowly workers; no, the intent is to get at the motivation behind the scene. What is that? Well, it's essentially a "license to steal" (concept has been used before) that seems to have become acceptable, if enough money is behind the thrust and if a market ideology is overlaid as a cloak.

James Fallows (Atlantic) says that Dr Doom (who has some good news) likes Timmy's work. After all, as the NY FED guy, he (Timmy) was talking systemic risk way back in 2003. Perhaps, now he has an opportunity to do something rather than just jaw bone.

Just to get the discussion started, one big piece of systemic risk is the rapid growth of types and kinds of computational resources being applied to support markets. Ah, you say, they could not work without the computer.

That is true. Yet, in many cases, those who provide the service hide behind a proprietary wall. Just remember how Madoff pulled off his feat. Too, that high-frequency trading (see Remarks: Wait! More exposures: "computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else's expense." To anyone who isn't at Goldman Sachs or the like, does that appeal to you as the way that we ought to be handling our beans?) is seen with such glamor, with a hint of respectability, suggests something.

Where the heck has common sense gone?

Every day, there ought to be an accounting of the markets that has some meaning. No, not just some figure like the closing DOW. Actually, something like a SOX for the market is a good analogy, yet we all know the grief that that initiative spawned. And, did it prevent this current mess?

Who can do an accounting? Does the FED know its own balance sheet? How can they know the economy's?

Oh, too, the markets are 24/7, you might argue. Ah, is that so by necessity? If we use a biological metaphor, what complex entity does not sleep?

Actually, probably as much effort ought to go into accounting and scrutiny as it does into efforts as maximizing the sizes of some pockets. We can probably use those media who watch (another example) as an example, yet it needs to be a deeper look.

Well, it's obvious that the accounting will be computational. So, there is no reason to take this as the grumblings of one who is anti-progress.

The problem is that the computational is new, non-intuitive, and run by wizards. All of this allows lots of room for exploitation and mischief.

Did I mention mis-used mathematics and theoretical flim-flam? That, too. Of course, truth engineering suggests that there isn't an easy answer (see Remarks).

Or, let's look at it again: Some statements in this blog deal with the Philosophy of Science (here's another nice little rundown), in particular as it applies to one issue contended by mainstream economics against the Vienna school: Critics of the Austrian school contend that by rejecting mathematics and econometrics, it has failed to contribute significantly to modern economics. Additionally, they contend that its methods currently consist of post-hoc analysis and do not generate testable implications; therefore, they fail the test of falsifiability.^[5] Austrian economists contend that testability in economics is virtually impossible since it relies on human actors who cannot be placed in a lab setting without altering their would-be actions.

Ah, falsificationism, but what does that have to do with making oodles of money by the best-and-brightest (see Goldman's Town Hall)?

Well, we can start with lessons to learn. One is that some things are undecidable no matter how much computational power is thrown at them. Therefore, they need considered thought (and voting - ah, not necessarily by a market game!).

Somehow, the PDE aura allows some type of pass on reason (ah, fairy dusting).

Remarks:

01/15/2015 -- This week, this post is getting read. Great! Nice little piece of work (kidding, in part) so many years ago. ... At last, a series that will establish the basis and extensions, as required. We are going to go back to some simple and come forward to the modern, complicated economy. Why? My long chain of ancestors (inherited via Prof. Lucio Arteaga) is one motivation.

12/06/2013 -- If only Ben would put a shot across the bow. He's helped the chimera unfold in unhealthy ways. He could, at least, say a mea culpa.

01/27/2012 -- Ben will continue to sack the savers; he must love the ca-pital-sino.

10/10/2011 -- If the OWS wants specifics, there are plenty to list.

02/01/2011 -- The chimera shines.

10/07/2010 -- Several principles need to be explored, such as the ergodic one.

05/07/2010 -- Out of control, essentially, and not healthy for the backbone.

02/10/2010 -- We could probably use the auto (and recent events) as a way to characterize the concepts of the blog. Of course, we have the value versus quality mis-think as part of the problem. Business Week reports that Toyota was asking suppliers for a 10% cut. Well, such scrimping would have an effect, even if it was only in looks. However, cutting into the life of a system may appear smart but, actually, relies on the same unstable basis as does a lot of economic thinking.

01/03/2010 -- More news on Goldman Sachs as the uber example of 'not on the behalf' comes to fore regularly. It'll need to be a separate subject at some point. Thanks to McClatchy: Nov 1, 2009 & Jan 3, 2010 (update). Goldman has to respond, of course.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

12/03/2009 -- Rationality and risk. Need a new look.

10/05/2009 -- Ah, yes, on the behalf of.

09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits. Ben is happy-talking, again.

09/09/09 -- We'll need to look at UUUN, as a framework.

09/04/2009 -- It has been decided about Ben, the saver sacker. We still need to discuss the overarching metaphor for the economy. Quants are it!!

Modified: 01/15/2015

Quants ignore complexity

Moral: Wherein we note that the title may not be strictly true, but we could rephrase as follows. Quants find interesting solutions to money seeking problems, in doing so they skirt the boundaries of undecidable regions, and, then, they tell an improper tale.

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Starting from the rear, the successes, when if looked at closely would probably be a small subset of tried approaches (we have Merton as source for such a criticism). And, given the reality, that the solution was 'magical', is not told since the fat cat paying the quant doesn't want to hear such.

Continuing to step back, the undecidable argument comes out of studying Vienna school thinking about the economy. We, on the western edge of the big pond, like to continue our 'manifest destiny' ways in the realms of the virtual and digital. Ah, only if it were to be. On the eastern side, their longer history leads to some insight about how easily we can be misled by statistical mechanics and, especially, game theory as it may be exploited via better handling of differential equations (namely, the partial types).

Look, folks, near zero is real.

The use of undecidable here is fairly broad (to be discussed, including the specific use within mathematics of independence).

Now, for the first point, that fat cat approaches to money making would include computational advances, and flim-flaming mathematics, is to be expected; exploit all avenues to maximize pocket size structure and fill. Yet, they need to be called for this. Why else do the hedge funds want rules that allow them to cloak what the hell that they do? If they were so smart, they would show what their shorts cover with the knowledge that no one else could figure it out.

Too, we see high-frequency trading leading to very smelly tactics; ah, intellectual cesspooling that it is.

That Madoff got away with his shenanigans for so long is directly related to his computational authority (access, support, etc.) and his ability to keep away proper scrutiny.

We'll look at this type of thing further.

Remarks:

10/24/2012 -- Goldman skimming via Quants and their creative finance.

03/15/2012 -- Okay, might have used incomputability (see post on Alan M. Turing) but stand by the context, the issues, and the need for resolutions. Wake up, quants (you, too, Ben).

05/25/2011 -- Are lemons the norm in finance?

05/17/2011 -- Hedge funds need some of our attention.

11/21/2010 -- Three years ago, it was said: Computational foci raise miraculous need. Still applies.

10/07/2010 -- Several principles need to be explored, such as the ergodic one.

05/25/2010 -- Who will (or can) lead out of the morass?

02/10/2010 -- Recent auto events have a similar basis, folks, to the mismash out of 'quant' thinking.

10/16/2009 -- 201K <-- 401K --> 25601K, this denotes the current financial gaming.

09/09/09 -- We'll need to look at UUUN, as a framework.

09/02/2009 -- Let's put undecidability on the table, please.

09/01/2009 -- Not just picking on Quants here, as we see product and process people making similar errors. Though, it's hard to talk error when money is rolling in the door.

Modified: 10/24/2012

The ideological errors of capitalism, V -- culture

Moral: Wherein we consider that the ideological problems, namely absconders, shell games, unconscionable exploitation of Adam Smith, and the Ca-pital-sino are not sufficient. Culture, and the lack of a Magna Carta, need attention.

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Ideological errors:

I - Casino, II - Adam Smith, III - Shell games, IV - Made-offs, V - Culture, VI - Classism, VII - Wealth, VIII - Disingenuity, IX - ... (list does not end)

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Yes, culture has run amok. Capitalism grew up in an environment that stressed gaming since players (serfs) feed their earnings to the lords (fat cats). Then, when the computational came more to fore, machinations that are counter to a sustainable future got more reward than did reasonable considerations about issues, such as undecidability, or did honest labor.

What? We need to look at 'must and may' in this context.

Yes, it's time to bite the bullet and discuss how overlaying our realities with models, abetted by our beasts, is problematic from the get go.

We like to think in musts, as in things being true or false. Gamers bring in 'may' from one particular world view. Thinkers note that the world is more gray than black and white.

One 'must' is what drives arbitrage's necessity. This ought to be a public good, not privatized (as we see with this example).

That we have to manage the 'may' aspects, and agree on the 'musts' set, is paramount. But, under what framework is this to be done?

Where did this 'must' and 'may' come from?

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ACM published an article in its Communications that struck a chord (Intro, Article). The topic seemed to offer ways and means for discussing some of the issues related to undecidability. The concept was brought up earlier in the context of discussing the Vienna position relative to the mathematization of some markets.

Now, mind you, while reading on, consider how the issues related to programming might be considered in the small as opposed to what we as humans face daily. However, we are overlaying computation on reality and making decisions thereby. In a sense, we're limiting the larger world to what the computational model can handle. Also, if there are problems in the small world of programming of the computer, cannot these suggest that those larger world problems might, in some cases, learn from what we know of computation and, too, ought we learn how to know about the 'undecidable' analogs? It's that latter part that is some troublesome, mostly since people more easily adopt comfortably closed world views than not (case closed).

The article talks about the three main issues. Firstly, there is language. Of course, on the computer side, we still talk semantics. But, closure is easier to impose. What problems do we see from our big set of natural languages? Needless to say, right from the get-go, there is a big thing looming. Secondly, we see a bow to the notion that a duck test is about all that we can do in many cases (especially, politics - joke). But, the larger issue is that dynamic states are what we deal with more than any type of limiting static analysis. Does that not complicate things? Thirdly, we need to make decisions using our language, properties assigned to entities within the frame of reference, and some type of reasoning.

Now, for all of these, the problems in the small on the computer are much more amenable to solutions (to wit, the internet, et al - though, to be fair, you don't have to go far to see failures). In the large, things are much more complex. One benefit of computational modeling is that we can learn how to identify problems and put them into some mode for being solved. Computation, in that sense, is only a continuation of the western mind's orderly (oh, wait, not so orderly) progression along the axis of improvement (ah, arguable, too).

But, the article shows that, even in the small, things are not as easily handled as many think, especially the young (yes, you, Microsoft, for one, -- gosh, I argued with some of those young whippersnappers way back in the early 90s, ..., oh well). You can think of the 'must' and 'may' sets as depicting those things that must follow (either true or false) and then that big thing of unknowns and their may'ness (neither true nor false). Of course, the idea is to have a strong set of musts and an ordered set of mays, these latter, it is desired, being more prevalent to those almost 'must' but not quite.

The point, here, is that we'll continue to use the concepts in trying to lay out why capitalism stinks, in its current form, for everyone but those who are on the taking side (0.2% taking more than 99.9% of the income or some such inequitable, and non-sustainable, number). Too, some fields, such as those related to systems engineering and operations management, are looking at how to do things better (and Lean is a chimera, in some cases, which I intend to show). But, those fields tend toward increasing the overlay. I say, to those folks, hey wait, in the small is loaded with problems. It's to be willy-nilly imposed on us?

Ah, yes, the miracle of superposition.

Remarks:

01/08/2019 -- Added in the index of posts on this subject.

09/01/2015 -- This was written five years ago. That was before QE infinity. Back then, any one who had gone through this before was looking for an unwind. But, that did not happen. The Fed doubled down, then tripled, down, then ... So, the addicts ran things to an inflated state (yes, appropriate usage). When Ben did mention some taper, they had a tantrum. ... So, here we are, in a corner, into which we have been painted. What will be the end result? Meaning, when things finally unwind? ... What we know is that Main Street did not benefit to the extent as did the pampered of Wall Street. Too, we see that computation is being exploited by idiots. The WSJ, on Saturday, mentioned one area. But, who is talking anything about moral hazards, these days? Well, you did read it here and ought to know that we have not forgotten its meaning.

03/16/2015 -- Let them eat cake.

07/28/2011 -- Cambridge non-commoners.

03/11/2011 -- Wired asks, ought we care? About I-Phone suicides.

10/26/2010 -- Adam knew the failings of 'free markets' quite well.

10/14/2010 -- Capitalism, as known now, requires an endless supply of suckers.

09/27/2010 -- Capitalism is for the good of us, let's bring that forward.

09/16/2010 -- So, ill-cultured-ness came from the classist's basis.

Modified: 01/08/2019

Financial engineering I

Moral: Wherein we take a long, deep look at what is behind the drive to financial engineering (see, an early opinion).

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This re-consideration is long overdue. Notice that the opinion mentioned in the above Moral dates from 2008. At that time, there were glimmers of problems to come. Many potential causes for the problem seemed to go back to misuse of mathematics and computation, from what I read. Of course, it turns out that these mainly caused things to be worse. That is, the problems date back to age-old human issues, such as greed, sheer stupidity, behavior and thinking that bordered on sociopath'y, and more.

Turns out that we had no perp walks (the abundance of rogues, notwithstanding). Of course, we also had all sorts of side-lines. Made-off took off some of the edge. He was punished as his type of shenanigan was easy to grasp. Not so much for those who used financial engineering as an umbrella.

Then Ben coddled the market'eers. But, we'll get back to all that.

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We are going to use MIT as a focal point for discussing financial engineering (see their blog). Evidently, in terms of academia, the Polytechnic Institute of New York University was the first to have a department certified by The International Association of Financial Engineers (wiki page). Notice that they got started in 1992. That's new, relatively.

However, they are affiliated with something that I'm associated with: SIAM (Society for Industrial and Applied Mathematics). Note that SIAM dates from 1951.

Aside: Comparing organizations by their time of inception can be interesting. IEEE dates to 1963, however it's predecessors dated from 1884 and 1912. SAE dates from 1905. IChemE formed in 1922. The older societies are by-products of the evolution of industry, its tools and practices. Later groups, many of them, have a heavy emphasis on computational approaches (my bailiwick, foks). So, the IAFE is new; too, what they're proposing, and doing, is very much dependent upon advanced computing.

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Before talking more on motivations (both for me and the IAFErs and in general), let's look at what can be read on Wikipedia: Financial Engineering, Computational finance, ..., Criticisms, ..., Securitization, ..., Risk (say of tranching), ...

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Motivations? Whatever money is we can agree that having enough is a worry for a lot of folks. Then, some folks seems to have too much. A sensible person, with a lot of dough, would want to use it for good purposes. All sorts of things come to mind: take care of the poor, help make a better future, etc. An example is this paper at the MIT site: Commercializing biomedical research through securitization techniques (see the paper).

That sounds like a good idea, right? It's far removed from some who seem to want to just make more money, in greater and greater heaps.

Recently, the WSJ had an article about Blackstone's plan (the Comments are interesting) to use financial engineering. In this case, they have bought 10s of thousands of houses (foreclosures, probably obtained on a dime). These will be rented. Okay. They want to be a landlord. That's nice (as long as they're more than the slum landlords that seem to crop up here and there). But, then, that's not enough (property management); they, Blackstone, want to package this whole thing so that they can sell bonds. Ah. Well, it's clever. Too, they might find buyers even if they cannot get ratings.

Aside: as we saw before, this type of thing was sold as cash-equivalent with ratings that were sky-high -- AAA, even. Many ate losses; some [were of] large, [staggering amounts] (some may not have unwound, yet, thanks to Ben). Can they, [this approach and these bonds], get ratings now?

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The thought about tranching holds but is under review. Though there seems to be a lot of silliness involved, there actually may be something of value to these ideas. So, we'll look at that, next. [Recall, the early characterization was that it looked liked searching for something from nothing (as in, perpetual motion).]

Remarks:

11/24/2013 -- The ACM has a review article on algorithmic trading that everyone ought to read. Essentially, if we use a plane as an example (consider what Boeing has had to do to get the 787 out and about), we would say that the financial folks are putting passengers on experimental aircraft with little regard to their safety and comfort. The whole notion is atrocious. How does it happen? They've coached things in mathematics and computerese, plus they've bastardized Adam Smith's ideas. Where is our sandbox, and where is the stable economic system that we can build?

09/18/2013-- Pop, fizz, ... Ben had to show largess because of idiots who ran the economy to the ground (rogues all around). Ben is going. What do we have to look forward to? Businessweek has a review issue (of the past five years). Several articles are especially interesting. Too, phrasing shines: spin dross into gold (in relation to mortgage bonds). Perhaps, we'll get back to some of the more pertinent ones, at some point. If we do, it would be to bring forward what has been said here, from the beginning. To wit? Tranche and trash (WSJ has a good take on that). Securitization? This article brings on weeping (one example of the misuse of mathematics and computing that has been harped about). Adoption, and improved understanding, of lazy evaluation let loose the powers that resulted in the wild web and its little children, namely social media and more. To grasp the problem, we have to go back to computing that is in some type of responsible area. Avionics comes to mind. If what is couched as software in looser domains (financial engineering? -- looser?, yes bailouts are the norm despite all of the protestations of the ruling elite; or the whole cadre of the poorer folk can just suck it up when there are problems in order to relieve the fat cats' loss) were to used in flight controls, would we not have planes falling out of the sky? We'll get back to the simple issues that seem to not be seen by the elites chasing after the bucks that Ben has been throwing out of his helicopter.

08/23/2013 -- Another example. Jon has it right: high-frequency to blame. Of course, there are several reasons for the market being out of control.

08/12/2013 -- The President of the US is talking about changing the mortgage game. For one, Fannie and Freddie would change dramatically. The WSJ reported that these ones are making oodles of money (if so, it's due to Ben's free money). We'll have to weigh in here, at our speed, of course. For one, we'll lay out the progression that got us to use of the CDO in the mortgage context. Fancy, creative finance is what drove these things. Too, we'll consider what ought things look like (look, there have been many changes for the past 100 years or so; a look at these issues from a temporally unbiased manner is imperative.

08/08/2013 -- The comment at MIT (as in, Massachusetts Institute of Technology) was rejected. It can be found below (08/02/2014). Over the years, I've lost a lot of comments that way as I didn't record the material prior to submit. By the way, MIT, one of my academic advisers during my studies did his graduate work at, and was degree'd from, your place. Of course, there are plenty of other institutions in the Boston area (however, the Cambridge pair (disclosure: I have more than a passing interest in New England -- all aspects -- due to its historical significance in the supposed dream of mankind) make an interesting couple).

08/05/2013 -- If things continue as they are going, in finance, the markets will die. They'll become warped caricatures of themselves which cannot attain long-term viability. The contributions of Financial Engineering are pushing, in many cases, to this type of unhealthy status. Yet, what else is there? So, people are piling into the equity chimera. It is guaranteed, that most will be losers. In fact, over the long term, we can show that no height of miscreant gain can offset the depths into which the majority are being trampled. Hopefully, this time around, we will learn something. Frankly, I wasn't aware enough to know what was going on last time. It took awhile for my head to accept that the idiots had us tied up. I've been slapped silly since and expect this to go on. Doves have the power, right now. And, you know that the peace twig is only for the Wall Street types. One would hope that something like FE would bring in the proper ethical view. We'll see. In the meantime, I'm going to get more into the misuse of mathematics. You would not expect this from MIT (wait! have not engineers been behind some of the largest banes of mankind as well as providing their wonderful boons? -- we'll venture, audaciously, into reviewing the balance there - as in, which is the larger set: boon, bane?). ... Age-old issues continue to plague us (more than the royal we). One would think that, perhaps, we could learn at some point (why not now?).

08/02/2013 -- Put the following comment, here, at MIT: I appreciate that you have this blog that I could run across (“what took me so long?,” I wonder – as I first ran into FE (as in, became aware of it) in the 2008 time frame with a reaction of incredulity – more below). Perhaps, the blog can be used to lead consideration of those things that cause us to build upon “sand (financial and otherwise)” when we ought to know better.

But, such a discussion would go beyond mere emphasis on the analytic frameworks, as even with modern computational assistance, such views are incomplete. That, of course, is arguable, especially when FE has been used to pad pockets (near-zero reality spreading that gain across the multitudes as losses). One thing that we all know is that money has its power. Finance needs more than ethics (see below) as a counter-balance.

—

Now, FE is what? If it is “engineering” as a discipline, upon what science is the endeavor based? I have not seen a good definition. Please point me to one.

I hope that the response is not economics (which we all know is dismal). But, if it is, then one would hope that there would be an experimental basis with which to evaluate long-term consequences of decisions made within this domain’s purview. And, that basis would have well-defined ways and means to handle the inherent complexity (suggesting, of course, core issues with computing).

Now, if the basis is purely computational mathematics, then we must even more stress the need for a “scientific” mindset, abetted with liberal doses of proper consideration for quasi-empirical notions. From what I’ve been seeing (observer), the current focusing on “algos” leaves a lot to be desired (say, as compared to the discipline found with product engineering). Especially does this seem to be true with FE (again, looking in as an outsider).

This past downturn has been followed with all sorts of changes (some from the FED’s actions) that have not been tested in any reasonable sense (except, perhaps, for their ability to pull money from pockets). In fact, if FE has a strong computational finance flavor, where is your test bed and laboratory? And, before that, the necessary methods and their metrics (broad sense assumed)?

This comment is not looking for flip answers. MIT has a strong presence in FE, from what I’ve seen via search results. A good start would be to lay out something that we could agree upon as the basis for discussion.

I’m not talking FE 101 as the deep philosophical issues (well beyond ethics) would come to the fore, immediately. Such is the importance of the discipline. It is where advanced computation (with the whole gamut of connotations) and what we value and use, as money, intersect.

—

Everywhere I look, there is void (absence of ethics and more?) except for silly notions of game theoretic concepts as the foundation for our future. GT is no more than one of the tools that need to be applied (from whence [is] its use as an over-arching worldview?).

Is it [not] true that Finance, and its engineering, would need to build more than chimeras for us to expect (yes, uncertainty and risk cannot be avoided) a sustainable future for ourselves and our progeny?

Modified: 11/24/2013

Why not?

Moral: Wherein we ask 'why not? which question can go a couple of ways. We're going to look at one of these. Actually, there is a third that is the mantra of the toddler learning about its will, that of others, and boundaries (say, good behavior), but we'll not go there either.

---

The query could indicate an awareness that something ought to be done or to happen, say like realizing one suggestion from the President's speech. Stay in school and be a good student (as good as you can be). Or, why not build a new plane with entirely new processes and material, that is, re-position the decision framework on an unknown center plus relax constraints along about all decision axes? In other words, the little engine that could. Or, why not pursue globalization? That's not the focus, for now.

The query could relate to reasons for something not happening, such as causal analysis tries to effect. Oh yes, risk analysis tries to do this before the fact. That use is what we're going after in order to pull together some 'un' words with a coherent message. For instance, 'undecidability' has be thrown about here, thanks to its use by the Vienna School. And, 'underdetermined' has been used, mainly due to its usefulness in resolving how we think about several dilemmas. We need to add 'unpredictable' as the risk people don't seem to know the concept.

Let's try this sequence of using these concepts (U U U N, unfortunately, not as meaningful as TANSTAAFL) in order to explain why these have appeared as well as to start discussion about what their applicability means to our difficult situations. There are other orders; this one seems to have some power for explication.

• Unpredictable - Actually, this ought to be used for the fact that we have no a priori knowledge of how events will unfold, for the most part. Of course, some stable events recur without our involvement or worry. For instance, days succeed one another. Yet, how many lost their wealth, and income, of late due to some idiocy (not necessarily their own) that can be explained? Do we know of any problematic programs? Say, has weather forecasting in your area been 100% on (whatever that would mean) this past summer? That the quants have run off after their stochastic taming attempts we'll be looking at further. That CAE folks have broken the rules of map/territory differentiation is another variation of mis-handling of that which this sequence denotes.
• Underdetermined - Well, what does this mean? We can use the wiki definition. Since predictability, and its complement (ah, is that so?), are figured using mathematics, albeit a subset dealing with things called statistics, let's use that type of story here. Basically, if we have a series of equations and unknowns to be determined, we like them to match in cardinality. That is, if there are too few equations, then we'll have to sort out the extra unknowns by various schemes (assumptions, swags, etc.). If there are too many equations (too few unknowns), then we're on the other side of the bad boat. The case, with computational modeling, is just this. Too much fudging (sorry, techie folks, but the truth has to be told). Also, note that we talked about unknowns. The equations would contain variables, to boot, whose definition and handling can be problematic.
• Undecidable - Now, we have to mention Turing's, and related, work, briefly. Then, we can just discuss the issues involved with the complicated concept, in general. It is more than just a computation problem, as we see from Hilbert's query. To shorten a potential long story, we can say that some issues are not related to time, sequence, or any type of order. Yet, we can always re-frame things to be decidable, within limits (meaning choice, allowable error, etc.), of course.
• NP (Nondeterministic polynomial) -- We're using this to introduce complexity. You see, even re-framing does not guarantee some solution unless we're exceptionally good (which some people are) or lucky (again, we see this). Yet, it's the computational aspect that is troublesome, such as using approximation, heuristics, and more. Why? We have had many of years to learn about human dynamics; yet, there continues to be intractable problems. Adding in the computer just exacerbates things incredibly. But, for thinking of complexity in terms of using the computer for solutions take the chess game. Well, that little game, on a small board, is highly complex. Something as seemingly simple as checking if two circuits are equivalent is, to boot.

Having gone through this, can you see other orders? It's the chicken/egg thing. For instance, 'undecidable' might be made the basis, with incompleteness being a key thing. The order, shown in the list, comes about since we're dealing with things that have gone awry due to our immaturity with using computational resources.

One could suggest a decision framework based upon this order that is operationally effective (with a bow of acknowledgment to quasi-empiricism). By the way, with NP at the core, how can we proceed? Ah, that is the essence of truth engineering's contribution.

But, this question of 'why not?' and UUUN ought to be part of the program management vernacular, and jargon. So, we'll continue this next time.

Note: An important concept will be separability. On predictability, some say, well, the sun will rise. Sure. But, weather was added in for this reason: will it be clear enough to see the rise? You see, NASA faces this problem all the time with shuttle launches. So, various windows of opportunity can be identified, with some ranking of certainty. Yet, the operational scheme is to be ready to take advantage; and, how many times does weather cause a mission delay? Now, if the parts of engineering that relate to business would just go back to their true framework, perhaps some of the hubris would diminish. The issues of underdetermination, undecidability and NP are important just because predictability, as a highly mathematicized approach, can be easily mis-used. Too, people play power games in these complex situations where someone who fails to solve an essentially intractable problem has his head removed. Sheesh. How the hell can we expect to learn without failure? Those who try and fail ought to be honored. Except in this situation that is very much apropos for mention and current: playing silly games with other peoples' monies in a risky fashion is verboten, by definition. Because of near-zero, we ought not even honor those who win. Stupid game, folks.

Remarks:

01/15/2015 -- This week, this post is getting read. Great! Nice little piece of work (kidding, in part) so many years ago. ... At last, a series that will establish the basis and extensions, as required. We are going to go back to some simple and come forward to the modern, complicated economy. Why? My long chain of ancestors (inherited via Prof. Lucio Arteaga) is one motivation.

03/11/2012 -- We need to update this, especially with a nod to Alan M. Turing.

10/07/2010 -- Several principles need to be explored, such as the ergodic one.

12/08/2009 -- Consider current CEOs in relation to Paul. Not fair? Well, these guys/gals have set themselves upon some supposed plane that is above the rest of us.

11/29/2009 -- Rationality and risk. Need a new look.

11/08/2009 -- The gigantic chimera needs proper attention.

10/16/2009 -- 201K <-- 401K --> 25601K, this denotes the current financial gaming.

Modified: 01/15/2015

Consumer, auto

Moral: Wherein we consider the current Toyota incidents as a chance to ask: who looks out for the consumer who is, essentially, the sink of the economy?

---

First, we ought to be grateful that it is Toyota who is in the hot seat. They (of course, after we acknowledge Deming) led the quality drive (pun) for a very long time and can regain their reputation.

The auto experience is an example of how big business (auto) and big government (and, in each case the best-and-brightest) tell us what we want. However, there is much more to the growing complexity of the auto than we're allowed to think about.

It is obvious that even the best cannot resolve some issues that underly software and its quirks. The net effect is that people, as drivers, will be central to containing the problems. Of course, we must act intelligently as drivers (for example, texting while driving is not smart).

What we're beginning to learn is that the car is becoming increasingly computerized or is becoming like a computer. Also, auto engineering has grown to cover quite a few intellectual domains.

Yet, we're driving as if we've just got past the horse-less carriage? What is the timeline of the current control systems (wheel, two pedals - some with three)? Are they outdated?

Is it any wonder that people have problems with the intuitive match, since generation by generation, we are becoming increasingly game oriented (which is not a bad thing). Why haven't we adjusted control systems?

Well, that the racing people (Danica, et al) have optimized their handling of the current configuration does lead toward some drivers thinking that being the wheel constitutes that they are in a race. Not so, people. It is transportation, for the most part. There are other enjoyments such as driving in inspiring landscapes, and such. That some drivers divert their attention to other things, and create risks, can be shown as indicative of the problem of the controls not engaging the person.

--- Aside

One question: why is there no user group related to car users? Every modern computational framework has one of these. What does the driver have? Don't say Car Talk, or manufacture brochures, and such. The issue is the state of being a driver and what it means. It is not maintenance, design (though, we need to look at serious modifications at some point), or trade-offs on performance. Those are covered by various interest groups.

Notice that most computer systems now allow some type of personalization? That was a struggle to attain. It did not just happen. The same sort of thing has shown up in the car, to a certain extent. You can set your environment, adjust seats, move the steering wheel, and such.

Ever think about what would be an improved driving experience? Let's look at the current configuration. The stop/go is related to the feet. This seems correct, carrying forward our long use of movement by walking. Then, we have the hands to change gears, signal, steer.

What if we steered by our feet? Don't laugh. Do not we balance with our lower appendage? We could signal, too; it wasn't long ago that the bright switch was on the floor. One had to stomp around to find the thing.

Having the switch on the steering wheel was nice, but there was not a standard way to do it. Of course, only the frequent traveler, who had to use different cars, had a problem. There are similar issues with differences that can be problematic.

However, what part of the game control knobs could be used with cars? There is a lot that could be discussed there.

---

And so, it's in the belly of the beast that we need to wake up to, as consumers. How are things communicating? What are the different chips? How are they used? Even this, what algorithms are being used for control?

You know what, people, some of the testing by the industry has been real-time, using drivers as the subjects. Allowing proprietary shields to some of these specifics ought not be the cause of lack of oversight.

Just asking questions here, folks. The fact of the matter is that we see one problem having a succession of possible causes thrown out (mat, pedal, switch, ...), with each cause and fix supposed to quiet the situation, yet the problem continued.

How many issues of this type lurk? You know, there is the concept of systemic which would be industry-wide.

We can say this: with software being a central factor, there are a whole lot of things that will be required to maintain stability of systems.

Anyone looking at those issues? Here, we have the concept of undecidability (dealing with decisions, especially those computational) to discuss.

Remarks:

01/22/2013 -- USA Today story on settlements. From three years ago, lest we forget.

02/08/2011 -- There was a report today concerning a study on the SUA problem that has been going on quietly. More news will be coming later when the report is technically analyzed.

09/28/2010 -- It nice to see the IEEE weigh in. Notice: sensors galore, drive in the loop, ...

04/19/2010 -- Genies, no not genius, indeed!

03/16/2010 -- Response to Toyota by Safety Research & Strategies, Inc. Did Toyota really use 'infallible' in describing their systems? One professor seems to think so.

03/12/2010 -- Toyota's web site that is related to recalls.

03/09/2010 -- Can of worms is what we've gotten from letting the genie out of the bottle.

02/22/2010 -- Business Week uses 'drive-by-wire' in an article about computational driving.

02/10/2010 -- There seems to be a rash of recalls, of late. The problem of value versus quality has been warped by an improper handling of near-zero.

Modified: 01/22/2013

Reflections on Steve Jobs' work

Moral: Wherein we look back at our computing history, a little.

---

Mr. Jobs' work was central to several themes that will continue (such as, truth engineering). He'll be fondly remembered by many, for a long time.

The below reflection is not to be considered as critical, in any sense. Rather, it is meant to be the start of several posts that deal with the evolution of computing and with what might be needed to bring the genie back into the bottle (impossible in practice, but nice to think about).

---

The blogger saw Steve Jobs in person before the blogger saw the first Mac.

The blogger was working on a project, based in Cupertino, that was trying to attain wafer-scale integration. As you would expect, the computational modeling requirements were enormous (as in, there was no possible way to print out the circuity on paper, let alone try to compute properties) and pushing the envelope. Of course, things may have been a little too risky from a business sense (but, that's another story).

That project was 30 years ago (Mr. Jobs wasn't the only former-hippie in the area); the idea was fairly progressive at the time. It was definitely too early for the desired scale. Mr. Jobs was interested in technological aspect, as were many, at the time.

---

It was a mere few months later that part of the world went crazy over the little Mac. Mind you, it was cute. But, it could not be, at the time, compared to what the blogger had as a workstation (which you could not lug around, of course) that was needed to handle the demands for large-scale modeling. Yes, the workstations were networked (early use of the local internet facilities), had large memory and storage, and were somewhat fast.

In the early days, it was the non-technical ones who were enthralled with the Mac. Or, those who were not fortunate enough to be working on projects that could (had to) shell out $100,000s (in multiples) for networked workstations (see Remarks 05/02/2012 for some details) and their software (very fat clients, essentially).

Later, the blogger was able to use enhanced Macs. That is, we put special purpose cards into the little guys to make them capable to support the work demand.

Unfortunately, after that, the companies that the blogger worked for went with the IBM/MS thing (if you type 'win' you lose -- type of deal). So, Bill Gates, too, will be another part (much later) of the story.

---

Now, of course, a device that fits into your palm is as capable, somewhat (cannot, as of yet, make any comparison of what are now termed 'apps'). Mind you, it takes banks of these devices to perform the types of tasks that we were attempting with workstations (needless to say, a lot of the speed-up is due to trickery, trimmings that may very well come back and bite us on our collective behinds).

---

In the past thirty years, the computing world has changed; yet, the underlying pinnings are no more sound. In fact, one might say that Mr. Jobs' work exacerbated the problem. Mind you, that is not a criticism. It means this: in the hands of about everyone is a whole lot of computing power, much of it wasted, and all of it can potentially contribute to an increasing amount of mayhem.

---

Of course, Mr. Jobs' outputs and devices have been crucial. For instance, his NeXT work was important in carrying forward several modeling technologies. Again, the blogger was involved with applying this capability.

There will be much, much more to look at.

---

In essence, Mr. Jobs' life and work was central to an expanding theme; of course, many have made money (extreme amounts) on the back of this development; too, many have suffered (the latest? I-Phone/IPAD suicides).

We need to look at the whole picture; Mr Jobs' (and his zen-mind) would appreciate that.

---

And, given that the recent protests are about what essentially is an exploitation by the best-and-brightest of computational frailties, the theme is very much apropos.

---

So, the coming posts will have more of a technical focus, as the blogger reflects on the changes that were concurrent with Mr. Jobs' life.

Remarks

10/05/2012 -- In hindsight, Mr. Jobs' foresight looks pretty good (if only we could understand 'reality distortion' a little better -- and how we can observe effects). Talents come in many shapes, but being able to see around the corner (never 20-20) can be useful (if one can keep from being overwhelmed by the possibilities - lesson there? computability issues). The truly independent mind would have its own model that would be, perhaps, immune to energies related to phenomenon like Jobs' persuasive ability (this battle is age-old, folks -- to wit, the little ones on your shoulders leading you left-or-right [meant as facetious, during this muck-raking season, that is, thankfully, over in a matter of weeks] - Zen is one of many disciplines related to the theme). One adage I remember, from my long years, is that you get a bunch of managers together, and, before you know it, water runs up hill.

09/28/2012 -- Nice little issues continue to be ignored.

05/02/2012 -- Need to add a few comments about the technology alluded to earlier in terms of workstations. For one, the Lisp Machine (Xerox, Symbolics, LMI, ...). These workstations were quite capable and expensive. In fact, embedded within a couple of the modern approaches are the improvements gained from developing (and using) these machine. Too, about the same time, Unix-based machines were becoming more capable. Of course, SUN stands out, but it was much later. ... During those times, object modeling was maturing. C++? Infancy. Java? Not even a glimmer. ... Numerically, FORTRAN was still king and would be for awhile. Databases. The relational modeling that made some so much money? Being born. ... In essence. Work, at that time, was pushing new methods for creating algorithms and heuristics. Some of the approaches continued until the mid-2000s for the reason that they were still effective and, by that time, had not been duplicated by other approaches. ...

01/17/2012 -- I've been slowly reading his authorized bio; at some point, more reflection will be forthcoming, especially when we look at equity (private and otherwise).  

11/04/2011 -- Tech Ticker asks a good questions about the darker side of Apple. Are any of the other tech companies any better?

10/20/2011 -- We still need to follow up. USAToday on Mr. Jobs.

10/17/2011 -- There is so much to cover, however look at Rick's latest post. Of course, Turing's test doesn't deal with the 'being' issue (what test would?).

10/11/2011 -- Weathermen reminisce about what the Mac meant to them. These are interesting and relate to a couple of points that need to be addressed: function/presentation, metrology/close enough (of course, they're trying to solve a hard problem, yet, flashy graphics do not 'truth' make).

10/09/2011 -- The prior Remarks will bring in issues related to the 13th Amendment. Aside: do employer-driven non-disclosure agreements tread on rights pronounced there?

10/09/2011 -- Kings have sovereignty over their dominion however large it may be. There, currently, is no king of the world of this type. CEOs have sovereignty over their companies. Now, many of these have domains that are larger (measured many ways) than geographical types of kingdoms. BUT, each has sovereignty over themselves (or ought to), ideally (constitutionally, if you're in the U.S.A.).

Now, being able to exhibit sovereignty requires talent of various sorts. Throughout history, those who ruled others may or may not have had this talent. From all of the turmoil over the millenia, one has to just marvel at the stupidity of these types, exhibited, in the modern age, by the CEO MVPs.

Our task is to foster that which enhances one's self-sovereignty and diminishes others' influence on oneself. Oh wait. The social media seem to be antithetical to this notion. Also, all of those issues related to mature interactions (of a peaceful manner) must be resolved (philosophers have long been involved with that dilemma).

It is this type of notions that are behind a lot of what motivates the current protests. Those who could (LT 1%) have exploited (and have been allowed to exploit) the rest (GT 99%).

We need to discuss how much Steve's work may, or may not, have helped those who want to achieve self-sovereignty. Zombie-like attachment to an idiot box (yes, including the so-called smart phone) provided by technology (owned and ruled by another) is probably one of the worse types of enslavement.

See Washington Post article (link, next Remarks): kids won't glance up from their IPhones. They'll never need to. (Ah, we'll bring them bed-pans? Wait on the little zombies hand and foot?).

10/9/2011 -- And, the Washington Post weighs in.

10/8/2011 -- Interesting essay, at WSJ, that bears some response, at some point. Technology, in this sense, provides rose-colored glasses and puppet strings to be pulled by the wizard? Ah, ironic that the Mac appeared in '84. What conversations are George and Steve having?

10/8/2011 -- These Remarks are, in part, collecting themes for the future posts related the subject. The genie is out of the bottle, as noted above; we cannot go back (the time arrow is forward -- for all that we know, now); therefore, resolving 'truth' issues will be central (not unlike the need for defensive mechanisms -- albeit, we would like to think that peace and love are the norm -- not succumbing to Dick's paranoia). The context requires a technical focus, but a whole lot of intuition is in order, to boot. That is, trained intuition. Do we know how to do that, yet? Somewhat, Steve's work was directed toward this.

10/07/2011 -- Steve's efforts raised two essential ideas to the fore such that they had to become part of the milieu: usability and object-orientation. The two (and a few others, to boot) will be looked at further in additional posts. Usability, especially the touch-click notions assisted by graphical displays, is central to certain types of human-computer interface. That interface can get in the way, though, from a technical focus (we'll define this further). The whole notion of entities with behavior (we'll look at the history of this development) that are accumulations of disparate (not disjoint, necessarily) attributes is at the basis of a whole lot of modeling. Too, though, it can lead to confusion (computational vertigo). Again, this is not criticism, but, rather, it is an attempt to discuss the evolution of computing using the effects of Steve's participation.

There is a sort of dichotomy involved here. Apple allows an intuitive interface that enhances creative efforts, of a sort. That type of interface can inhibit others (we'll get into that). At the same time, though, this whole evolution has favored those who have numeracy (with the effect of reducing (or trying to) the innumerant set into the corner of eternal dumb-ness. Ah, no wonder things are so awry as the best-and-brightest are numerant and are exploiting the game.

One can argue (zen) that numeracy is more idiotic than not. Got that, smart folks? We'll be explaining why. Hopefully, the protesters of Wall Street do not lose their sense of urgency.

10/07/2011 -- Steve believed in his own intuition. We'll have to look at that a little, in this sense: mathematics and science have denigrated intuition (many examples of the counter-intuitive being correct - to a certain point) yet we know that we need this in order to be creative. Those two poles, or seeming poles, are at the crux of the computational problems of today.

Modified: 10/05/2012

New game in town?

Moral: Wherein we pause while the transition unfolds as we have to await Janet's imprint.

Ben will be missed. But, it's a few months until he goes, so he'll still have the ability to sway matters.

Our prime concern is that he so willingly slapped the savers (from silly onward) in his effort to bolster those things that are called markets but, in reality, are chimerical game settings (or, if you would, ca-pital-sino). It took awhile, but about a year ago, things finally inflated to where new heights were seen almost daily. Yes, the grand old illusion came back.

How could this be called an illusion? Well, go talk to Main streeters, for instance. But, that's a punt. Talk to people, like myself. I'm as trained as Ben albeit I focused my energies on different problem sets. Given that I'm not in academia is not a bad mark, from where I sit. Actually, I'm allowed more freedom of thought than any of those institutionalized minds.

So, to answer the question: how is this all an illusion? There are several ways to characterize the thing. Firstly, I don't hear people talking near-zero (perhaps, we'll get this with Janet once she spreads her wings). You see, folks, those who have been enriched (always) get their takings off the backs of others (not arguing Marxism, but just go around and talk to folks doing the real work - let me be a guide - I'm eminently qualified to do so when you consider the wide range of jobs that I've had and environments within which I worked - to wit, Bachelors and Masters when in my 30s (prior to that, many, many jobs) after which I sampled life with the egg heads). Secondly, there have been trappings put upon the "market" such that it is far removed from being effective. How is this? Crap, abstraction-philos have had their way. Why? Money, power, ... From where I sit, I can show the shaky basis, the fact of which is too hard to see when you're playing with the jerks - which the Fed does, by the way -- all sorts of trappings of the rich (don't get hung up in the mahogany, Janet).

Aside: There's this thing called the C-suite where like knows like. Hah! I've seen members; too, I've seen those who got there as they progressed through the hoops (working since I was a kid and I'm 71).

Thirdly, carrying on from earlier, those things that the egg heads (though, endowments need to be re-considered in a newer set of lights and measures) think of have been enabled (fostered) by computational progress (by real engineering, by the way). Unfortunately, the lack of a sandbox is more than problematic. What we have is analogous to a plane loaded with people being experimented on in real-time while in the air.

Aside: A 737 went into the drink from just that type of thing where the ground crew was having the pilot run through some tests that made things worse when they ought to have landed while there was sufficient control. Those in the know will recall this incident.

Fourthly, along with the thinking and the computational resource improvements, there is a belief in mathematics that is unwarranted'ly held. How did this come about? Application focus, essentially, and an inordinate reliance on regression to the mean. Oh, we can go on about this at length, after we get some agreement about how not to use operationalist'ic urging (or, how to be more mature while succumbing to the sirens of money/wealth/greed/, et al.

Fifthly, ..., let's quit this for awhile.

---

We have to let Janet find her sea-legs, get her bearings, and any other number of types of things that a new person ought to be honeymooned for when starting a new venture. That is easy enough.

---

The focus here could be back to the Cosmology series. Too, we'll propose and discuss things not done.

• Why did Ben have to break 1%? There is no place where those who need a small income can go. No, he actually is drawing from these folks in order to lay flowers in the path of the idiotic fat cats (who, by the way, got the crap to hit the fan -- sheesh, Ben). 
• Given the dire straits into which Ben has forced the saver (note, please, that the loss did not come about for these types until there was an accumulative negative payout due to declining rates over the past few years) to go toward risk (as if someone will bail these people out for following the idiots) as that becomes the only choice (only those who cannot hold on for the longer term while awaiting for the economic brains to wise up). At any point along that route we've been on since 2008, Ben could have awakened to the reality of the set of people that he's tortured, willingly. 
• Tapering? The sillies got all anxious. Ben has been of so accommodating the past few years. For what? Yes, the fat cats love it. But, most are being taken to the cleaners. One example would be those who are leaving the job market due to its warped nature nowadays. 
• ...

In 2009, we posted A New Day, twice (Truth Engineering, 7oops7) plus More on New Day. We will have to take a re-look at the years since then. Many things, that could have been, did not come to be (we could have nationalized the stupid banks - the mess would not be any worse than it is now, folks). Jobs programs, training (several things here were not done). 

Janet's advent, "hope"fully, will be as expectant as then. How many months for a honeymoon? 

... mostly complete, except for editing, and links ...

Remarks: Modified: 10/26/2013

10/26/2013 -- Ben has sacked the savers for years now, slapping them silly. Why? A WSJ article looked at high-class pawnshops a couple of days ago. These fill the need for people who need money but cannot get it from the banks (stupidity there, too). So, they use collateral for a loan and pay high interest. How high? Some pay over 200%, per year. What is Ben paying or having banks pay their savers (customers)? Way less than 1%. That is the best example of being out of whack with economic realities that one could ask for. Yet, does the Fed see? Why is the interest low? To push savers toward higher risk? To appease the gaming crowd (most likely this, as these are big-pocketed folks)? To help people afford housing (on someone else's back?)? ... Janet's take on this is unknown, but she has to know that they're looking like idiots. You know what? Most of those loans are paid, even with the high interest. And, still, Ben slaps the savers (King Alan mentioned saving, of late). We ought to ask the Fed, what happened to prudence?