Bunker Bear's take on recent economic and market instability. BB says that the instability is mostly due to government Meatheads jacking around with the dollar and with regulations, triggering the Chaos from Chaos Theory. He says that Chaos and irrational economic behavior make math models of the economy unreliable.
Bunker Bear is one of the Free Enterprise Cartoon Bears.
Made with Xtranormal State desktop app.
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1) Predictably Unpredictable, The Hidden Forces that Shape Our Decisions by Dan Ariely, Harper 2009
2) What Are the Odds? Chance in Everyday Life by Mike Orkin, W. H. Freeman and Co., 2000
3) The Drunkard's Walk, How Randomness Rules Our Lives, by Leonard Mlodinow, Vintage Books, 2008
4) How We Know What Isn't So, The Fallibility of Human Reason in Everyday Life, by Thomas Gilovich, The Free Press, 1991
5) 7. Chaos Theory for Beginners
http://www.abarim-publications.com/ChaosTheoryIntroduction.html
"The Uncertainty Principle prohibits accuracy. Therefore, the initial situation of a complex system can not be accurately determined, and the evolution of a complex system can therefore not be accurately predicted. "
6) About Chaos
http://www.physicscentral.com/explore/action/chaos-1.cfm
"The only way to tackle this kind of problem is by a series of iterations—calculate the gravitational forces, let the objects move for a short time under these forces, then recalculate the forces based on the objects' new positions, etc. Even without a computer, Poincaré could see that the resulting orbits were aperiodic and wildly disordered. Moreover he discovered that a small change in the initial conditions—the initial positions and velocities of the three objects—produced a huge change in the orbits. This important observation was to lie fallow for eighty years, awaiting the development of chaos theory."
7) Lorenz Solver
http://www.me.vt.edu/chaos/lorenz.html
[Java: select alt t button, and change a value]
8) Chaos Theory: A Brief Introduction
http://www.imho.com/grae/chaos/chaos.html
"An employee of IBM, Benoit Mandelbrot was a mathematician studying this self-similarity. One of the areas he was studying was cotton price fluctuations. No matter how the data on cotton prices was analyzed, the results did not fit the normal distribution."
9) Does God Play Dice (US Edition): The Mathematics of Chaos, by Neil Stewart, Wiley, 1991
10) The Soothsayers of Macroeconometrics 9-19-11
http://american.com/archive/2011/september/the-soothsayers-of-macroeconometrics
11) Bad Numbers or Could-Be-Better Data? 10-16-09
http://www.foxbusiness.com/story/markets/upcoming-1162126734/
"In my current job," Krueger told NABE, "I have been constantly surprised at how little quantitative information can be brought to bear on fundamental policy questions...in part, this reflects... the fact that existing data are not useable or sufficiently detailed, or that relevant data simply do not exist."
12) From Bubble to Depression? 4-6-09
http://online.wsj.com/article/SB123897612802791281.html
"If home-ownership costs were included in the CPI, inflation would have been 6.2% instead of 3.3%."
"With nominal interest rates around 6% and inflation around 6%, the real interest rate was near zero, so household borrowing took off. As measured by the Case-Shiller 10 city index, the accumulated inflation in home-ownership costs between January 1999 and June 2006 was 151%, but the CPI measured a mere 23% increase."
"As the Federal Reserve monitored inflation in the early part of this decade, home-price increases were no longer visible in the CPI, so the lax monetary policy continued. Even after the Fed began to slowly raise the fed-funds rate in May 2004, the average rate remained low and the bubble continued to inflate for two more years." (2)
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Mandelbrot (Chaos Theory) Taleb (Black Swan) on marketsby ericbs52476,596 views
@SwarmerBees Govt created the problem with the Community Reinvestment Act forcing bad loans, sale of risk to Fannie and Freddie (eventually to us), the Fed providing artificial credit. The Fed was required to assure that the derivatives were safe. The SEC was on watch (and couldn't even catch Madoff). All this provided a false sense of security. Greenspan is a central planner, not a libertarian. People like to compare real capitalism to ideal govt. The real comparison is to real govt.
MrTugwit 6 months ago
One thing BB did get right- it was morons who had no fricking idea what their mathematical tools were telling them. They didn't have a clue how the new financial products that were magnifying apparent assets where also magnifying exposure to exponential losses. When asked where the invisible hand was by Congressional investigators, the Libertarian Greenspan remarked how he was baffled why self interest did not self regulate this exposure. No economist buys BB'-TParty's alternative history.
SwarmerBees 6 months ago
@surrealnumber Well, I didn't limit my video to the US population like you said either ;)
MrTugwit 6 months ago
that really had nothing to do with my post......
surrealnumber 6 months ago
@surrealnumber A lot of control freaks don't trust the self-organization of the invisible hand. They want our morons in Washington to cure the economy with low interest rates, inflation, regulations, and govt spending. To replace GDProduction with GDSpending of worthless paper. And Keynesians think their bogus "multipliers" let us get more out than we put in. It's interesting to see TV pundits asking what our Meatheads can do to "cure" the economy, as if they actually know what they are doing.
MrTugwit 6 months ago
billions of people, humans in all walks and under all systems still try to act in their own best interest. it is flawed to only take the US population as acting in this way. even the child making shoes in a sweat shop are doing so to better their lot in life.
i am not attempting to disprove or refute your vid, just adding to it.
surrealnumber 6 months ago