This weekend, reader CJ in Connecticut (who sadly missed out meet-up back there in June) has a very well thought-out question about how economics works…so we will dig into that. Then we’ll ponder how comparative risk between assets classes may be starting to come loose from its moorings…and the ice cream Saturday…er…sundae will be considering how to invest in the Ganzfeld. Before going there, however, a twinge of Gestalt from our usual quick survey of this morning’s headlines. You’ll want to pay close attention this morning because we’re going to use the news to do some ad hoc “Event scoring” as a way to intuit the future and make better investment decisions…as we arrive at another system of handicapping the future on our way to the $2-dollar options window…
[Long report warning: >7,000 words]
When someone says the word “GroupThink” I’m sure that there are some negative connotations. But in this morning’s context the term “groupthink” is not a bad thing since we’ll to be using it to help (as a group project for our mutual benefit) to come up with a different way of looking at financial data. Specifically what we’re after is to define interlocking dependencies which can then hone our investing returns not just in the market but also in day-to-day decision-making about life in general. Before starting this new look into mechanistic causality in complex systems though, there’s nothing to starting the day with some headlines as we wait for the idiotic mainstream press to deliver word of the first royal diaper being filled. Oh, wait! That’s already been done...so back to our battle between complexity theory and good old-fashioned economic reductionism.
An algorithm is simply a set of instructions for a computer system to follow in a particular order. In the case of Big Data, the steps are capture, organize, integrate, analyze, and act. Using this approach, we can build a fine example of the many trip-wires an innocent civilian could stumble over in the modern surveillance society. Plus we have our monthly check of west coast port data with is oftentimes a decent truth detector about the economy and an update on many headlines and our trading model. You may need a third cup for this morning’s report…
It is reliably reported that during the peak of Tulip Mania,
offers were made to buy as much as 12-acres of land with a single tulip bulb. Surely, something was amiss, a reasonable person might have argued at the time, but the market price was what it was….and until the mania broke (and fortunes were spilt right and left) it seems for a while like tulips had become a kind of
money. In a previous report, I pointed out some of the fallacy of
Bitcoins, not the least of which is their total reliance on electricity (which
makes them useless in a post-collapse economy) but I also projected a major
decline from then peaks. This morning, we shall update our thinking and
look ahead. After, that is, a nibble of this and a sup of that…this
being breakfast and the sups of Mrs. Olson’s half-caf to brace us for the
descent into digital madness.
Since “going off the farm” for a bit, a number of realizations wandered into my personal headspace, a good thing overall, but they are serious tasks which will keep me busy for many months to come. I’m refocusing on self-sufficiency and with good reason. You’ll see why as we serve up the remainder of Capt. Midnight’s five-parter (which will be parsed out in three more “shorties” on the free site, plus we will go into some details about one topic in particular, namely peak oil (thanks to Oilman 2). But first, before rolling up our sleeves, we have a few things to talk about including one topic which I’ve been wrestling with for several weeks for a book I’ve been asked to write…