Black Swan Author on the coming economic crisis

I read The Black Swan: The Impact of the Highly Improbable soon after it came out and it has dominated my thinking on our current world situation since.

I found two videos I think are very worthwhile to watch:

And further:

and finally:

Complexity Example: Asia Stocks up and then down. US markets down then up.

So Asian market shot up initially as the debt ceiling deal was reached and today have dropped since of the United State stock performance from a “sell-off”. I put sell-off in quotes since that is an assumption and the system is too complex and too reactive so that feedback and feed forward loops are broken. We have built and rely on a system no one fully understands. My worry is about entering a long term depression. When most capital is controller by a few large mono-corporations and a small percentage of individuals we are exposed to a system crash risk. Now I cannot say for sure as fact that there will be a crash, but I believe it will happen. The solution is to start changes now. Reduce investment in the stock market and support small local business. Remove your money from large banks. Start you own small business. I do not know the full answer and this is certainly not definitive solutions, but we should at least start thinking and discussing about changing now.

What is going on in London? Forget the details and let discuss the causes

What is going on in London? Forget the details and let discuss the causes.


The rioting going on in London right now and I have very little idea why: here are some pictures

http://www.boston.com/bigpicture/2011/08/london_riots.html

This is pretty out of hand for one of the worlds most advanced democracies. Two blogs I follow discuss the causes:

elephantjournal-Ben Ralston

Really

While I agree we are experiencing a reset and not only should things change or must they change, but they are changing for the better. I feel the capital inequity and reward system we currently have it broken and will change the question is how bad things are going to get and how long before we reach some stable form.

Some of the discussion in the above blogs is about the root cause being the system and includes two facts: we can afford to spend on war but cut the budget for public education and our economy is suffering from what I feel is bad policy. When we look at the actions of the riots and only look to punish we will never reach a true solution. People are angry and I really believe this is a direct artifact on the powerlessness people feel right now.

What “branches” do you think we need to cut? I believe we need to: 1) deconstruct the super-sized banking, (no such thing as “too big to fail”- the ship is made of iron and it will sink” 2) deconstruct industrial food farming, (check “polyfarms.com”) 3) deconstruct the military industrial complex (large military will always find a war) and 4) reduce our consumption economy (60% of our economy is consumer spending—buying crap)

It is a sad state of affairs when our "blame first" society. I will also point out that we (in "first" world "democracies") eagerly enter wars but scoff at spending a 1/100th of the price for peace. The example I’ll give is from “Charlie Wilson’s War”. We happily spent a billion dollars a year to kill Soviets (stinger missiles at the time were ~$20,000 a piece) and after they left we (the west) had an opportunity to help rebuild Afghanistan, but could give anything.

We need to realize that we truly are interconnected and there are simple but difficult solutions to our complex problems. I don't know what the future will bring, but I am hopeful after things I read here and people I meet that things are changing for the better and better every day.

I have to believe things will get better. We have no control over external events only our internal reactions. I am a firm believe in what you focus on is way will grow (a la "secret"). So stay positive!!! I recommend "hoodwinked" as a book that will first depress and then enforce a positive spirit about the future. It is the follow up to "confessions of an economic hitman" author John Perkins. Next, I will mention this focus exercise.

Look around the area you are in and notice all the red objects. Spend a minute doing this. Now close your eyes and keep the closed. Now try and recall all the blue objects around you—it is a lot harder because you were focused on the red objects. Stay focused on the positive. You will find what you expect to find. Now I do not mean to ignore warnings or as an excuse for dangerous behavior. Actually, that is a part of my Hark’s rule #1. Know when you have a belief versus the truth so when you do get contradictory information you are open to adjusting your belief.

This is awful, so skip this paragraph if you want. I read one book that details an experiment using Puppies to see how experience affects attitude. Unfortunately I cannot remember the details, but two groups of puppies were formed and then each puppy was put in one of two water tanks. Group one had a water tank that had a platform in the corner that the puppy could eventual find and save itself. Group two had a water tank with no platform and the puppy had to swim until it went under and had to be rescued. One group of puppies was conditioned to be “hopeless” and another group of puppies to be “hopeful”. Then the puppies were placed a second time in a water tank with no platform and no means of escape. The puppies that had a platform the first time lasted significantly longer than the group that was “conditioned” to swim until rescue.

So my conclusion is given the choice I have to believe that while things are changing faster than ever before and our problems seem out of control we now have the faculty and technology to overcome the complex problems in the near future. There will be difficult changes and we must persevere, but in the end it will be better for everyone. I do not want to go to far out there but I believe we will enter a new “golden age” of humankind.

I was speaking with my friend, mofongo-con-pernil.blogspot., a few months ago and he mentioned how before September 11th he was a pacifist and now is pro-war (not exactly what he said- but he feels our wars are “justified’. My response is that in every thing I have learned/read since September 11th I have become a dove or pacifist. Here is a reading list that has affected my feelings on our “defense” based foreign policy.

The truth is that striking out with anger hurts us just as much as the person or country we strike. I could discuss endless the different things that could be done after the fact within the last two decades, but we really need to change the things that can be changed now.

I will also say that having an aerospace engineering degree I have never directly worked on weapons program, as much as anything related to aerospace is limited to defense (it is all interrelated). However, I used to feel I would never again work on a weapons program, but having been laid off for six months last year I do not have the luxury if I was in the same situation to turn down a job that lets me work in a field I love (reliability/risk analysis). But I do hope for a future where “defense” is a much smaller priority on not just America’s, but the entire planets budget.

More Lefty intelligence

Inspiration from Lefties “I was taught that the way of progress was neither swift nor easy.” –Marie Curie.




Did you know that lefty actor Keaun Reeve’s first name is Hawaiin? It translates as “cool breeze over the mountains”



“If something totally unexpected happens that after the fact seems obvious- it wasn’t.” Frank Hark.



I’ll title this Hark’s Rule II- “If something unexpected occurs that should have been easily predicted and avoided does not mean we are smarter now and have reduced risk it actually a reason to remain cautious and understand that another unexpected event (different from the first) is more likely to occur.

Root Cause Analysis of the Washington Monument

There was a problem with erosion of the Washington Monument. The Monuments rate of erosion had increased. The initial cause was do to harsh chemicals used to clean off pigeon droppings. This being an important monument for America a study was conducted to solve this problem. This is the story I heard as recounted by Dr. Woods during her presentation at PSAM 10 in Seattle June 11,2010. I apologize if any of the story is mis-communicated and any mistakes are mine.

As the study began the first thing that was discovered was the rate of erosion increased after harsh cleaning chemicals began to be used. The analysts therefore concluded that the cleansers were the problem. The cleansers were being used to combat a problem related to pigeon poop. Yup, need to solve that problem. We cannot have one of our most powerful symbols covered in pigeon poop. Doesn’t say good things about us if we allowed that kind of mess. So, why were pigeons there? Well, it turns out that pigeons like spiders (probably like I like hamburgers (I know I have eaten more than I should have in the past) and spiders were now nesting in the Washington Monument? Well, Spiders like gnats and gnats were all over the Washington Monument and only recently. It turns out that gnats come out right at dusk and they are attracted to light. The Monument is bathed in light which were turned on the same time each day not accounting for the seasons. So the solution to the whole problem was to just turn the lights on later (well after dusk). No gnats therefore means no spiders and therefore no pigeons.

Now this solutions is fantastic. You are saving electricity (very small amount) and there is no need to use harsh cleansers. All in all an elegant solution to the problem. Of course, this is obvious after the fact, but how could this solution be enacted by a single person. This has to be done with a few people getting together at different levels to even see the problem. The cleaning crew isn’t going to know enough to solve this problem. The lightning person won’t know- even if there is a lightning person since the lights may have been automated.

My point is if something seems obvious after the fact- it isn’t. You see this “blame game” going on whenever you have an accident that seems obvious after the fact. When the details are effectively communicated the problem can be solved and solved quickly- only once all the factors are known. From the Titanic to now the British Petroleum oil spill- complex failures will have solutions, but only after the fact until we can our attitudes and focus. I still refuse to believe that BP is solely to blame. There are thousands of oil wells in the Gulf and around the world. The real problem was our human nature to underestimate risk.