ip204

Sort Of Revolution

2012-01-17T12:54:00.001+01:00

Merry Christmas!

2012-01-06T17:36:00.001+01:00

The Frenchman

2011-12-29T03:53:00.001+01:00

Kurt Gödel was right

2011-12-26T01:32:00.001+01:00

From Parrondo’s Games

2011-11-03T22:18:00.001+01:00

Aspects of Stochastic Control and Switching From Parrondo's Games to Electrical Circuits_zero_gain_surface

CA

2011-10-19T15:14:00.001+02:00

Exploratory Data Analysis Using Fisher Information

2011-09-27T19:25:00.001+02:00

B.R. Frieden and R.A. Gatenby (Eds), Exploratory Data Analysis using Fisher Information (Springer, London 2007)
For some years now, Roy Frieden has been exploring the consequences of studying physical phenomena on the basis of Fisher information and extreme physical information (EPI). From the very beginning, the results were spectacular. From the slenderest beginnings, many of the fundamental equations of physics emerged from these EPI principles: the Klein-Gordon and Dirac equations of quantum mechanics as well as the Schrödinger equation; Newton's second law; Maxwell's equations; many of the equations of general relativity; and this does not exhaust the list. These ideas, gradually developed in a series of publications in very respectable and severely refereed scientific journals, were brought together in Physics from Fisher Information (1998) and its successor, Science from Fisher Information (2004).
It was clear from that work that the approach should not be limited to physics but the extent to which it has shown itself fruitful, charted in Frieden's latest book, is a revelation. This is not a monograph but a collection of essays, edited by Frieden and R.A. Gatenby, a life scientist, on a very wide range of topics, all of which are shown to benefit from the use of EPI. The book begins with an introduction by Frieden, in which the reader is told what Fisher information is and how to use it, employing the EPI approach. Eight chapters follow, contributed by the editors and 11 other authors, on financial economics (Frieden, R.J. Hawkins and and J.L. d'Anna); tissue growth and cancer (by the editors); statistical mechanics and `thermal physics' - not very different from what I was taught to call thermodynamics (A. and A.R. Plastino); astrobiology (by Frieden and B.H. Soffer), which is described as a unification of biology and astrophysics; encryption (R.C. Venkatesan); the management of sustainable environmental systems (A.L. Mayer, C.W. Pawlowski, B.D. Fath and H. Cabezas); ecology (by the editors); and to conclude, `Sociohistory: an information theory of social change' (M.I. Yolles and Frieden).
This makes for a very adventurous book, all of which makes fascinating reading though some chapters are more readable than others and occasionally, the authors seem unnecessarily on the defensive, as though they expect readers to have a red pencil at the ready. The list of chapters already gives a good idea of the diversity of the contents and even within individual chapters, the coverage is often surprising; thus Chapter 7 (Environmental systems) ends with a section on `Sociopolitical data', in which "state failure", the risk of a "catatastrophic collapse of a nation's governing body" is examined and illustrated with a histogram showing the stability of five countries, Sweden, France, Argentina, Sierra Leone and Haiti. The Fisher index based on eight criteria is very high (indicating great stability) for Sweden, low for Argentina, Sierra Leone and Haiti and only marginally better for France (in the years between 1961 and 1995)! The concluding chapter (Sociohistory) is the most difficult for readers from the exact sciences, unaccustomed to Kant's notion of the noumenon, the Hegelian doctrine of the dialectic and the autonomous holon, though the authors have tried hard to render the vocabulary of the sociologist palatable.
The very different nature of the topics examined makes it less easy to appreciate the remarkable role of EPI than in the earlier books, addressed to physicists in language with which they were familiar, however revolutionary the theory presented. I imagine that readers of this latest offering will peruse only the chapter that deals with their own particular interest. I therefore wish to emphasize that the truly original feature of this book - apart from EPI itself - is precisely its broad coverage; its demonstration that such a simple principle, easily grasped, is capable of yielding valuable results in such a wide range of fields of enquiry. I found Frieden's earlier books immensely original and intellectually thrilling and this one adds yet more weight to that opinion.
P.W. Hawkes
(M.A., Ph.D., Sc.D., Cambridge; emeritus Director of Research, CNRS)

Transition

2011-09-02T02:03:00.001+02:00

There will come a time in your life when you will ask yourself a series of questions.
Am I happy with who I am?
Am I happy with the people around me?
Am I happy with what I'm doing?
Am I happy with the way my life is going?
Do I have a life or am I just living?
Do not let these questions strain or trouble you just point yourself in the direction of your dreams find your strength in the sound and make your transition.

Do not spend to much time thinking and not enough doing.
Did I try the hardest at any of my dreams?
Did I purposely let others discourage me when I knew I could?
Will I die never knowing what I could have been or could of done?
Do not let these doubts restrain of trouble you just point yourself in the direction of your dreams.
Find your strength in the sound and make your transition.

There will be people who say you can't - you will.
There will be people who say you don't mix this with that and you will say "watch me".
There will be people who will say play it safe, that's to risky - you will take that chance and have no fear.
You wont let these questions restrain or trouble you.
You will point yourself in the direction of your dreams.
You will find the strength in the sound and make your transition.

For those who know its time to leave the house and go back to the field.
Find your strength in the sound and make your transition.

--The Unknown Writer
(Underground Resistance - Transition)

When I was young music sounded like this :)

2011-08-24T21:33:00.001+02:00

Recap

2011-07-04T16:49:00.001+02:00

Stress

2011-05-14T14:05:00.001+02:00

Science, Strategy and War: The Strategic Theory of John Boyd

2011-05-11T14:55:00.001+02:00

by Frans Osinga

This book has the rather ambitious goal of "better understanding the strategic thought developed" by Colonel John Boyd (USAF ret.). For the most part it succeeds in doing this. Since Boyd chose not consolidate his thoughts into one or more books, Osinga was forced to develop his information from Boyd's slides used to brief his ideas and from Boyd's notes. So what does this book tell the reader about the "strategic thought" of Colonel Boyd?

Although Osinga does not address it, John Boyd appears to have had what can only be called the mind of an engineer. The application of scientific principals to practical ends seemed to come naturally to him. He actually received a degree in industrial engineering from Georgia Tech in 1962, but this appeared to have primarily credentialed his existing engineering talent.

Boyd was an experienced and successful fighter pilot from the Korean War and his initial engineering efforts had to do with designing an air superiority fighter. To this end Boyd developed a simple, but revolutionary concept for fighter design namely the relationship of Energy to Maneuverability or EM concept. Once Boyd developed the EM Concept it was obvious, but he was surprised to discover that no one had thought of it before. Application of this concept led directly to the development of the F-15 fighter and to the most cost effective and versatile fighter produced in the last quarter of the 20th Century, the F-16.

Boyd is best known for his brilliant and original concept of command and control (C2) processes, the so-called Observation, Orientation, Decision, Action (OODA) loop. Like the EM concept once somebody thinks of it the OODA loop is obvious, but only after Boyd developed it. The OODA loop describes what are quite complex C2 processes. It was developed directly from Boyd's analysis of physics specifically the Second Law of Thermodynamics, and Quantum Mechanics (especially Heisenberg's Law of Indeterminacy) and their relationship to conflict and war. Because Boyd developed the OODA loop from these broad scientific concepts, it is applicable to tactical, operational, and strategic situations.

With the OODA loop Boyd had developed the precursor of what was later described as "Network Centric Warfare" both in its limited meaning as a Command, Control, Computer, Communications, Intelligence, Reconnaissance, and Surveillance (C4ISR) system and its broader strategic implications as a strategic concept. Boyd emphasized the importance of communications as the foundation of the loop and information management as essential to the Orientation portion of the loop. The OODA strategic applications were related to creating greater flexibility by moving decision making down to the lowest level while creating situational awareness on the highest level. On a grand strategy level Boyd noted the goal of any conflict was to undermine the morale and will of an opponent by "getting inside the opponents OODA loop and creating confusion and uncertainty. In this respect in successfully he transformed the teachings of Chinese strategic thinker Sun Tzu into modern applications.

This book provides considerably more about Boyd's thinking and more importantly his approach to problem solving. The few random notes in this review are meant to give an idea of the breadth and depth of this brilliant engineer and military analyst as revealed by this outstanding study.

By Retired Reader

Contrary to several reviewers of Osinga's book, I found it easy to read. Tthe presentation of Boyd's concepts is lucid, logical, and leads the reader through some of the less obvious aspects of Boyd's work with commendable aplomb.
The recent growth of interest in COL. Boyd's work led to certain mystification of it ("One has to be Boyd to understand Boyd" - as if one had to be Einstein to understand the Theory of Relativity!). It should not be so. As a matter of fact, the work of Boyd is straightforward and, like all general theories, relatively simple. Like any good general theory, it applies to essentially all situations and environments encountered within the field for which that theory has been created. In the case of Boyd, the field is practically all that pertains to any form of creative human activity. Hence, the major drawback of many analyses of Boyd's work (including the work of Osinga) is placing intellectual restraints on Boyd's Discourse, and consequent the insistence that it belongs only to the realm of military strategy and its lesser expressions. In reality, Boyd applies, and his work has been admirably fitted to, domains as varied as business, healthcare, homeland security, education and training etc.
Boyd is a full and exhaustive precursor of what somewhat faddish business terminology describes nowadays as "adaptive leadership". His work goes, however much farther than that that, and in order to learn how to lead oneself, organizations, or even nations in turbulent, dynamically changing environments, one really needs not go further than Boyd's analyses. The greatest attribute of Osinga's book is making that point abundantly clear.
Boyd IS simple, and it is this simplicity that often baffles the students of Boyd's work - it is that very same simplicity that leads to a profound synthesis of the exceedingly complex subject. Osinga helps the reader to understand these relationships, and helps the reader to understand that understanding Boyd's work leads to a higher form of knowing and interacting with the surrounding environment. It was the breadth of knowledge and intellectual curiosity rather than narrow professional specialization that allowed Boyd to see relations among facts and disciplines that have been entirely missed by others. It was the spirit of a generalist that allowed him to present his quintessential analysis of patterns which constitute the basis of our responses to all, not only the military, challenges. Osinga's work provides a most needed bridge between those seeking solutions to these problems and John Boyd who provides seemingly simple, yet profound answers.

By Dr. Dag Von Lubitz "Generalist and Conceptualist"

Rodney

2011-05-08T22:10:00.001+02:00

Resenje

2011-05-03T15:58:00.001+02:00

http://www.b92.net/info/komentari.php?nav_id=509749#rating

Zavrsio sam prava u Francuskoj i odgovorno tvrdim da je za Srbiju jedino resenje protektorat u sudovima odnosno, da od svake zemlje EU pozajmimo po 1-2 sudije i tuzioca za velike pare na par godina jer mi te kadrove NEMAMO.
Niti ti nasi "pravnici" kapiraju kako se doslo do neke pravne norme buduci da ih je vecina samo prepisana od Austrije ili Francuske, niti oni imaju predstave sta je pravda. Gledao sam slucajno na TV-u neko rociste iz Haga gde se cela sudnica smejala Tomi Fili koji je tvrdio da po nasem zakonodavstvu ne moze biti okarakterisana kao silovanje situacija u kojoj nema fizicke prisile vec je lik zrtvi rekao da ce da joj pobije celu porodicu ako ne legne. Sudija, tuzioci, novinari...svi se smeju do suza a Fila stoji i kao trudi se da ostane ozbiljan i u cudu sto se svi oni smeju - e to su nasi "pravnici" odnosno DB saradnici buduci da sve slucajeve bitnenasi "pravnici" i resavaju preko DB-a(Kovacevic,Pahomije,Ceca,Luka Karadzic...).
Otpusiti sve iz pravosudja, zaposliti za ogromne pare sudije i tuzioce iz EU i u njih nekorumpiranu decu koja su tek diplomirala da uce zanat. I za kraj, bez ikakve namere da vredjam bilo koga. Sudije, tuzioci i advokati su kulturna, ekonomska, intelektualna i kakva god hocete elita jednog normalnog drustva. Kada vidim fotografiju tuzioca Zagorke, uz svo postovanje, ja nikakvu elitu ne vidim u njoj ali vidim stanje u kome se ova drzava nalazi.
(Embrouz Birs, 3. maj 2011 11:16)

http://www.b92.net/info/komentari.php?nav_id=509749#rating

Easter

2011-04-24T13:20:00.001+02:00

Applications of Random Matrices in Physics

2011-04-06T21:44:00.001+02:00

Édouard Brezin (Editor), Vladimir Kazakov (Editor), Didina Serban (Editor), Paul Wiegmann (Editor), Anton Zabrodin (Editor)

Random matrices are widely and successfully used in physics for almost 60-70 years, beginning with the works of Dyson and Wigner. Although it is an old subject, it is constantly developing into new areas of physics and mathematics. It constitutes now a part of the general culture of a theoretical physicist. Mathematical methods inspired by random matrix theory become more powerful, sophisticated and enjoy rapidly growing applications in physics. Recent examples include the calculation of universal correlations in the mesoscopic system, new applications in disordered and quantum chaotic systems, in combinatorial and growth models, as well as the recent breakthrough, due to the matrix models, in two dimensional gravity and string theory and the non-abelian gauge theories. The book consists of the lectures of the leading specialists and covers rather systematically many of these topics. It can be useful to the specialists in various subjects using random matrices, from PhD students to confirmed scientists.

Beat the Best Stock

2011-03-26T12:53:00.001+01:00

Can We Learn to Beat the Best Stock

Woods

2011-03-15T16:49:00.001+01:00

NY

2011-03-15T08:57:00.001+01:00

ParRondo’s not paradox

2011-03-08T21:01:00.002+01:00

Randomly Chosen Chaotic Maps Can Give Rise to Nearly Ordered Behavior

Advances in Decision Making Under Risk and Uncertainty

2011-03-06T22:53:00.001+01:00

Whether we like it or not we all feel that the world is uncertain. From choosing a new technology to selecting a job, we rarely know in advance what outcome will result from our decisions. Unfortunately, the standard theory of choice under uncertainty developed in the early forties and fifties turns out to be too rigid to take many tricky issues of choice under uncertainty into account. The good news is that we have now moved away from the early descriptively inadequate modeling of behavior. This book brings the reader into contact with the accomplished progress in individual decision making through the most recent contributions to uncertainty modeling and behavioral decision making. It also introduces the reader into the many subtle issues to be resolved for rational choice under uncertainty.

Nuit Blanche

2011-01-21T19:08:00.001+01:00

Magnicent

2011-01-18T23:12:00.001+01:00

A Time Goes By

2010-12-05T23:33:00.001+01:00

No Retreat, No Surrender

2010-11-27T01:04:00.001+01:00

Do you think you have it all ? :D

2010-10-09T14:06:00.001+02:00

Cena Trimalchionis

Arčibald Rajs- Čujte Srbi

2010-09-18T17:54:00.001+02:00

Arčibald Rajs - ČUJTE SRBI...!

Oi Gere

2010-09-08T16:19:00.001+02:00

…the weight is off our shoulders

2010-09-06T18:02:00.001+02:00

Crunch

2010-09-06T17:38:00.001+02:00

Hackney Colliery Band

2010-09-06T17:22:00.001+02:00

See

2010-09-06T17:18:00.001+02:00

ACEEEEED

2010-09-05T04:07:00.002+02:00

The Original SNL Bailout Skit from 2008 that got edited by NBC

2010-08-30T16:10:00.001+02:00

New London School Of Electronics

2010-08-30T01:52:00.001+02:00

Great Interview on RT

2010-08-24T23:08:00.001+02:00

MmmHmm

2010-07-13T20:04:00.001+02:00

Brazil special fishing method

2010-07-04T18:26:00.001+02:00

Cohomology of Vector Bundles & Syzygies

2010-06-12T04:40:00.000+02:00

Jerzy Weyman (Author)

The central theme of this book is an exposition of the geometric technique of calculating syzygies. It is written from a point of view of commutative algebra, and without assuming any knowledge of representation theory the calculation of syzygies of determinantal varieties is explained. The starting point is a definition of Schur functors, and these are discussed from both an algebraic and geometric point of view. Then a chapter on various versions of Bott's Theorem leads on to a careful explanation of the technique itself, based on a description of the direct image of a Koszul complex. Applications to determinantal varieties follow, plus there are also chapters on applications of the technique to rank varieties for symmetric and skew symmetric tensors of arbitrary degree, closures of conjugacy classes of nilpotent matrices, discriminants and resultants. Numerous exercises are included to give the reader insight into how to apply this important method.

Sometimes

2010-03-09T21:31:00.001+01:00

The Electric Universe

2010-03-08T20:51:00.001+01:00

by Wallace Thornhill & David Talbott

Review by Michael Gmirkin

I've recently read several other books of interest, including Arp's Seeing Red, Lerner's The Big Bang Never Happened, Thornhill & Talbott's other work Thunderbolts of the Gods and Scott's The Electric Sky.

These are all rather excellent works of science by folks who know what they're talking about, and don't need to resort to "dark matter," "dark energy," "black holes," "neutron stars" or other fictitious entities to explain the workings of the universe.

Rather they go about it from an electrical / plasma (ionized matter with electrical properties) point of view. In this way, "surprising" features from the "standard model" point of view are demystified as simple electrical / plasma phenomena known from lab experiments and electrical theory dating as far back as Birkeland, Alfven, CER Bruce, Juergens and a host of others.

It's time that good science make its way back into physics and astronomy. It's also time that abstract maths be put in their place as a tool and NOT as a prime mover and shaker. Science should be based first on observation {!}. That's exactly what Thornhill and Talbott do in The Electric Universe. They *observe* the universe *as it is* and then apply known electrical and plasma processes to explain it.

The material is accessible to the layman. However, it may behoove readers to do additional reading to fill in any conceptual gaps. Keep an open mind, and your world view may be changed forever. Mine has been changed permanently since introduction to the material a year ago. The universe is finally beginning to make some physical sense that has been lacking in the sad world of "Big Bang" untested (often *untestable* {!}), unproven hypotheticals (dark matter, dark energy, neutron stars, black holes, WIMPs, MACHOs). It's time to end dogmatic adherence to a paradigm that has consistently failed in its predictions and embrace an electrical / plasma interpretation that can make specific testable /verifiable predictions.

If you enjoy this book, you'll probably enjoy the books listed above, as well.

Simmer

2010-02-11T21:18:00.001+01:00

The Mathematics of Games And Gambling: Second Edition. The Anneli Lax New Mathematical Library

2010-02-08T17:14:00.001+01:00

by Edward Packel (Author)

review by By Ronald W. Thomas

As a casual poker player and a sometimes visitor to casinos and race tracks, I wasn't sure what to expect when I picked up this book; however, I found it was just what I needed. Was it a how-to book for Texas Holdem or other specific gambling pursuits? Not at all. But did the book give me ideas on how to improve my poker playing, my understanding of odds and betting strategy in a wide variety of games? Definitely! There's a vast amount of information in a relatively compact book. True it takes a little bit of math background to work through some of the material, but there is enough basic material along with ample references to a relevant bibliography and appropriate web sites so that everyone could learn something from this book. The author is quick to point out his intention of not delving too deeply into some topics, but he does provide abundant resources for the reader who is interested in digging deeper.

The writing style is light and enjoyable. The author even touches on life's lessons and philosophies of life, but most importantly he provides insight into the thought process employed by consistent winners. Along with the number of charts and tables that layout odds, decision trees, and probabilities, there are exercises at the end of each chapter for the reader to increase his understanding of the material presented. It is a book that can be read through from beginning to end or read in sections. The book is certainly digestible for the casual, interested reader, but maybe not all in one meal. Digesting it section by section worked better for me. Again there is a wide range of information on gambling theory with broad application.

The book starts with a brief history of gambling, even referencing some literature in which gambling played a role. The book studies basic theory involved in probability and expectations, permutations, binomial distribution and game theory. There are sections dedicated to various games from dice to poker to backgammon along with applications to more serious topics such as prisoner interrogation, faith beliefs and even war.

In today's age in which people are trying to engage in activities that exercise their minds, this book with its material and exercises provides ideal mind stimulation. It is a broad, educational and entertaining math book.

Evolve Your Brain: The Science of Changing Your Mind

2010-02-08T16:53:00.001+01:00

Review by By Nina Clock

I had no trouble whatsoever relating to Dr. Dispenza's descriptions of how the human brain functions. In fact, I found his no-nonsense discussions of the brain extremely refreshing and encouraging, especially in view of the fact that I was so sorely in need of obtaining a practical working model of why large-scale healing and personal change are even possible.

For me, the greatest value of Dr. Dispenza's book is in gaining the practical tools to heal. To that end, what healed Dr. Dispenza's multiple vertebral fractures was his level of consciousness and his ability to think. Without prior knowledge of how to help himself, he more than likely would have gone the conventional route of treatment and ended up as a cripple. And without the Four Pillars of Healing (well-described in the text), the cases of spontaneous remission presented by other people in the book would probably not have occurred. Thus, when all is said and done, the power of thought appears to be at the core of healing.

To make this book more user-friendly for myself, I outlined what were, for me, its key points:

1) Decide who/what you want to be and create an ideal picture of that in your mind.
2) Allow the frontal lobe of your brain to fulfill its functions as your guide; the frontal lobe is so skillful that the only limitation on its ability to construct these models is your own skill at envisioning the ideal of yourself. The frontal lobe allows you to transcend the slow, linear process of evolution and to advance beyond the natural progression of adaptation.
3) Regularly rehearse the new attitudes and behaviors internally and externally, including at bedtime.
4) Break your brain and body's chemical addictions to negative thinking and feelings by stopping automatic negative thinking and feeling and interrupting the flow of repetitive thoughts that occupy most of your waking moments.
5) Address your attitudes and discover what groups of thoughts that are clustered together in habitual sequence (i.e., attitudes) that you have to break free of.
6) Resolve to no longer revisit memories of your past and the associated attitudes that define you as a victim.
7) Stop blaming others for your problems.
8) Deny your familiar internal voice and external voices of other people.
9) Replace negative "priming" with positive priming, such as feeling appreciation and gratitude; mentally rehearsing your new role; taking breaks in routine (such as travel); changing negative perceptions to positive perceptions).
10) Break away from customary routines.
11) Get feedback from others on how you're doing [as the "new person"].
12) Devote every spare minute to moving into the new life.
13) Become so involved in focusing on the present moment and on your intent that you completely lose track of your body, time, and space. Nothing, then, will be real but your thoughts.
14) Seek out instruction to get to the next level.
15) Work with the Four Pillars of Healing.
16) Make the healing/changing process the most important thing in your life.

Since reading Evolve Your Brain, I have come across another book called What To Say When You Talk To Yourself by Shad Helmstetter. This book is in the same vein, but it concentrates on the practical aspects of reprogramming your thoughts and feelings and spends almost no time on related scientific aspects of brain chemistry. (What To Say was written much earlier than Dr. Dispenza's book, but is unequivocally on the same page as the work of Joe Dispenza.)

I highly recommend both books - and note that after several weeks of working with each of them, I am in incredibly different and better spaces than I was.

Option Prices as Probabilities: A New Look at Generalized Black-Scholes Formulae

2010-02-08T16:45:00.001+01:00

Christophe Profeta (Author), Bernard Roynette (Author), Marc Yor (Author)

The Black-Scholes formula plays a central role in Mathematical Finance; it gives the right price at which buyer and seller can agree with, in the geometric Brownian framework, when strike K and maturity T are given. This yields an explicit well-known formula, obtained by Black and Scholes in 1973.

The present volume gives another representation of this formula in terms of Brownian last passages times, which, to our knowledge, has ever been made in this sense.

The volume is devoted to various extensions and discussions of features and quantities stemming from the last passages times representation in the Brownian case such as: past-future martingales, last passage times up to a finite horizon, pseudo-inverses of processes... They are developed in eight chapters, with complements, appendices and exercises.

Chapter 1:
Reading the Black-Scholes Formula in Terms of First and Last Passage Times

Chapter 2:
Generalized Black-Scholes Formulae for Martingales, in Terms of Last Passage Times

Chapter 3:
Representation of some particular Azéma supermartingales

Chapter 4:
An Interesting Family of Black-Scholes Perpetuities

Chapter 5:
Study of Last Passage Times up to a Finite Horizon

Chapter 6:
Put Option as Joint Distribution Function in Strike and Maturity

Chapter 7:
Existence and Properties of Pseudo-Inverses for Bessel and Related Processes

Chapter 8:
Existence of Pseudo-Inverses for Diffusions

Blue Planet

2010-02-08T16:18:00.001+01:00

Starving the Monkeys: An Entrepreneurial Horror

2010-02-01T04:51:00.001+01:00

by Tom Baugh

Review by By S. Meyer "Perrogrande"

This book provides a compelling look at the underlying ills of society today, built logically from the core perspective of micro-economics and the interaction of free individuals ('Men' in the author's perspective, though not being gender-specific). He contrasts the approach of 'Men' in society with those who extract value without contributing to the positive growth of society as a whole (the 'Monkeys' referenced in the title).

The author presents his theory from the ground up, interspersing examples from his life as a Marine Officer and successful entrepreneur overlayed with a theoretical tribe of people who grow and prosper by focusing their energy on helping each other by adding value to their lives. The tribe begins to falter once the Monkeys begin to hinder the Men and stall the forward progress of the tribe.

The positives of the book are many--
* the author gives us not only his opinions as to where society has strayed from a productive path, but offers concrete solutions as to what we as Individuals can do to reorient ourselves toward the productive path, and rebuild a segment of society to focus on achievement rather than notions of victimhood or arbitrary enforcement of 'fairness'.
* His philosophy is grounded in his personal history with colorful and richly detailed examples, and how they relate to the building of his theory.
* The tribe examples introduced through the early sections of the book give us a continuity and reference frame from which to compare with how society looks today. In fact, over time the tribe evolves in some very non-productive ways to match the challenges we face today with those who believe they are 'owed' something without contributing to society as a whole.
* In addition to the examples, the author assigns much homework in the form of internet research, additional reading, and specific courses of action by which anyone can improve themself. You don't have to buy in to the author's philosophy to recognize the benefit that this additional learning and perspective can offer. With self-discipline and study and, yes, hard work, you can improve your life significantly.

My only fundamental complaint with the book comes toward the end in the last couple of chapters. The author drifts away from his central thesis in attempting to portray how the Collective-oriented government structure will attempt to dissuade (even by force) those who do not buy in to the collectivist point of view. While I agree in principle with the author's conclusions, I think the examples could have been approached in a different way that better reflect and connect logically with the central thesis of the book. But these logical inconsistencies don't detract from the overall value of the book viewed as a whole.

To me the most powerful aspect of the book is that it gives a person, one who decides upon reading it to be a Man and not a Monkey, concrete steps to begin the path to self-sufficiency. Too many political screeds in press today only hope to excite people and stir up anger, but conclude only with generalities such as 'less government' or 'lower taxes' and not something that an Individual can undertake the very next day to make a difference -- the benefit to this book is that you walk away with action that you can take as an individual to improve yourself and your immediate circumstances. As more people follow the author's advice, the world will be a better place. Not by force, not by any negative actions, but by positive reinforcement of personal growth for the betterment of your fellow man.

In the end, isn't that what it's all about?

Beautiful Time

2009-12-30T17:01:00.001+01:00

I've had a beautiful time during Christmas holiday in Munich. Did everything (almost)that tourist can do in 10 days :D . I’m officially in love with that city! There is something soothing in atmosphere. Seems that it is a good place for a second home. I even have no issues with high taxes there, state and the city are managed perfect… My grain spread is still on, little lighter than before,but I'm still in the mood for buying more…

Spread…

2009-12-12T21:27:00.001+01:00

I will watch closely for a result of a spread trade next week. I will buy as much if it goes above –100, or book a loss on larger part of a position if it goes below –175. I expect to book profit at 0-50 levels. Wednesday will tell… :)

Cloudbusting

2009-12-02T06:57:00.001+01:00

A World of Chance: Betting on Religion, Games, Wall Street

2009-11-25T07:32:00.001+01:00

By Gabrielle A. Brenner

This (rather unhelpfully titled) book discusses gambling from an Economics viewpoint, and argues three main theses. That traditional moralistic objections to gambling are misguided. That all forms of gambling should be treated as ordinary businesses -- private rather than governmental, regulated and taxed no more stringently than any other private business. That zero-sum (fair) gambling with a small chance of a big gain, which academics usually regard as irrational (for reasons of risk-aversion and concave utility function) is explainable under a "leapfrogging" model in which people care about relative economic status. The style is at the serious end of the "popular science" spectrum, a little too weighty for pleasant bedtime reading, but (aside from a mathematical appendix) perfectly understandable by an educated reader without needing any specific technical background.

Much of the book deals with history, from the 20th and earlier centuries, of gambling practices: how laws on gambling were influenced overtly by cultural and ethical views (and covertly by vested business interests) in different countries and periods, and what were the economic effects of these laws. This historical discussion, used to support their arguments for contemporary policy, is quite differently focussed and much more detailed than most "popular science" style books treating the history of risk or chance, e.g. Against the Gods: The Remarkable Story of Risk and Chances Are: Adventures in Probability. Part of the book discusses empirical evidence to refute the traditional moralistic concerns about gambling: statistically, gamblers behave as responsibly in other affairs as non-gamblers, and big lottery winners typically do not fritter away their winnings.

I found the factual material to be both interesting and informative. As for any book arguing a thesis, the arguments need to be read critically. It's written from what one might call the Economist magazine view of the world, which I tend to share, so I am predisposed to agree with the authors' theses, but let me try to engage it critically anyway.

The authors correctly point out that gambling involving small stakes and small rewards (slot machines, poker, sports betting) is just a form of entertainment, so the existence of a thicket of laws restricting this particular form of entertainment is bizarre. They note the clearly desirable risk-taking that drives economic growth in a free market society, from the hands-on entrepreneur starting a physical business to the familiar financial spectrum of venture capital, IPOs, and secondary markets (i.e. Wall Street) to which speculators, who as individuals are acting as gamblers, have the desirable effect of adding liquidity. But they are implicitly arguing there is some meaningful connection between entertainment gambling and liquidity provision in more tangible markets. Despite their collection of cute historical stories ("poker banks" in the settlement of the southern and western U.S.; late 19th century "bucket shops" allowing ordinary people to bet on
commodity price fluctuations; lottery brokers founding the Chase National Bank and the First National Bank of NYC) and a brief chapter (8) speculating on how sources of capital and attitudes to risk-taking varied between different societies, the connection today is not particularly convincing.

Underlying this book is the first author's theory (reiterated in Appendix 1) of "leapfrogging", developed in the 1980s. This takes the familiar idea that people are concerned with their relative position in society, and tweaks it by adding the "dynamical" notion that people whose position has declined are more motivated to take risks to restore their position. This sounds plausible, and is an interesting academic exercise to examine. Though (to caricature slightly) it is attacking a recent dogma that people are "predictably irrational" in dealing with matters of risk, and returning to the earlier Economics dogma that people always act rationally, so that apparent irrationality must mean that people are acting in accordance with some less apparent objective.

By David J. Aldous "gentleman scholar"

Where conservatives have it wrong

2009-11-22T20:04:00.001+01:00

By Jeff Jacoby
Boston Globe Columnist / November 22, 2009

YOU’RE A sensible, principled conservative. You want America to be a land of boundless opportunity and freedom, where people are treated as individuals and judged on their merits. You reject the divisive identity politics of the left - what matters most about any of us, you would insist, is not race or class or ethnic origins: it is personal character and achievement. There are few things about contemporary politics you deplore more than the demonizing or scapegoating of entire groups (“white males,’’ “the rich,’’ “the Christian right,’’ “gun owners’’), as though every member of the group is interchangeable and indistinguishable, wholly defined by a single disparaging label.

But let someone mention “illegal immigrants,’’ and your principles fly out the window…

D O P E !

2009-11-20T15:11:00.001+01:00

Interesting Spread

2009-11-16T02:06:00.001+01:00

I’m building a position on March Wheat/Corn spread at 2:-3 ratio.Plan is to put on every dip until –70, stop is somewhere below recent lows, and i plan to take most of profits at 0-25 region.

In All the Wrong Places

2009-11-08T18:55:00.001+01:00

New Edge Is Born

2009-10-20T18:34:00.001+02:00

Keep Control

2009-10-15T15:43:00.001+02:00

Revealed: The ghost fleet of the recession anchored just east of Singapore

2009-09-24T03:09:00.001+02:00

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year…

I broke my option book :(

2009-09-18T20:36:00.001+02:00

R’n’R

2009-09-16T02:14:00.001+02:00

Patterns of Speculation: A Study in Observational Econophysics

2009-09-09T19:08:00.001+02:00

by Bertrand M. Roehner

In their book on game theory John von Neumann and Oskar Morgenstern observe that it is the study of "free fall which brought forth mechanics".
But, contrary to conventional wisdom, the study of free fall did not rest solely on observing the fall of an apple.
The author aptly notes that it required the observation of a whole set of falling bodies in order to get rid of a bunch of unessential factors and to
single out the influence of gravity. And of course it required Newton's genius to include into this set of falling bodies the "fall" of the moon.
In short, by describing in detail a single stockmarket crash one will fail to understand what is common to ALL stockmarket crashes. The author extends the argument even further: by focusing solely on stock
markets one will fail to recognize what is common to a broad variety of speculative episodes.
One might think that there is a big difference between a price peak for postage stamps and one for stock prices but this difference may
be more appearant than real as indeed is the difference between the fall of an apple and that of the moon.
What kind of results are brough about by this unconventional approach?
At the present time (October 2002) we are particularly interested in real estate prices. Will they continue to rise, will they stabilize or are they going to fall in the coming years?
The sections on real estate price peaks provide several clues:
1) It is in the most expensive markets (e.g. San Francisco as opposed to say Pittsburgh, PA) that prices begin to rise first at the start of the
peak; it is in these markets that prices peak first which gives a hint about when the downturn will occur in other markets; and it is in expensive places that the price increases are the strongest.
2) Price peaks for real estate resemble those for stocks in that they are almost symmetrical with respect to the maximum; which means that where prices experienced strong increases, they also experience
big declines.
The last part of the book provides a theoretical framework.
It begins with an insightful chapter that points out that there are in fact two classes of speculative peaks: the U- and the S-class. The first includes all bulky commodities, the second comprises real property, collector books, diamonds, bonds and in a general way all items for which transportation cost plays no role and for which investors can (at negligible cost) select the item that they want to buy.
The last chapters show how these effects can be accounted for provided one uses a model which includes a memory effect.
This means that one should use a dynamical equation of order at least equal to two. In addition, a basic parameter is the proportion of investors,i.e. people who buy in order to sell with a profit within a few years, with respect to the number of "users" who buy a house in order to live in it for say a generation.
A superb book. On almost every page, good ideas come swirling and densily packed.

Language in Mind: Advances in the Study of Language and Thought

2009-09-03T10:23:00.001+02:00

by Dedre Gentner (Editor), Susan Goldin-Meadow (Editor)

The idea that the language we speak influences the way we think has evoked perennial fascination and intense controversy. According to the strong version of this hypothesis, called the Sapir-Whorf hypothesis after the American linguists who propounded it, languages vary in their semantic partitioning of the world, and the structure of one's language influences how one understands the world. Thus speakers of different languages perceive the world differently. Although the last two decades have been marked by extreme skepticism concerning the possible effects of language on thought, recent theoretical and methodological advances in cognitive science have given the question new life. Research in linguistics and linguistic anthropology has revealed striking differences in cross-linguistic semantic patterns, and cognitive psychology has developed subtle techniques for studying how people represent and remember experience. It is now possible to test predictions about how a given language influences the thinking of its speakers. Language in Mind includes contributions from both skeptics and believers and from a range of fields. It contains work in cognitive psychology, cognitive development, linguistics, anthropology, and animal cognition. The topics discussed include space, number, motion, gender, theory of mind, thematic roles, and the ontological distinction between objects and substances. The contributors include Melissa Bowerman, Eve Clark, Jill de Villiers, Peter de Villiers, Giyoo Hatano, Stan Kuczaj, Barbara Landau, Stephen Levinson, John Lucy, Barbara Malt, Dan Slobin, Steven Sloman, Elizabeth Spelke, and Michael Tomasello.

Review
"Remember the Sapir-Whorf hypothesis—the idea that the language you speak shapes the way you think? It's been pronounced dead a number of times in the past fifty years, and yet it just won't go away. To understand why not, read Language in Mind. There the leading scholars in the field take a fresh look at Sapir-Whorf and offer intriguing new evidence for it. But they do more than just revive the hypothesis. They rework it and give it a genuinely new shape as they show how it bears on a range of new issues in language and thinking. It is this revised perspective that will inspire the next generation of thinking and research on the way language affects thought."
—Herbert H. Clark, Department of Psychology, Stanford University

"The current status of the linguistic relativity debate is laid out in this volume, in a series of position papers and experimental demonstrations, by some of the most interesting and theoretically diverse investigators working in this area today. The book presents strong arguments on both sides. It aims to stimulate enlightened debate rather than to settle the matter. Definitely required reading for both psychologists and linguists interested in whether and how a language influences the way its users think."
—Lila Gleitman, Department of Psychology, University of Pennsylvania

Decision Options: The Art and Science of Making Decisions

2009-08-29T16:12:00.001+02:00

by Gill Eapen

Although uncertainty and flexibility are important attributes that drive the value of an investment, they are seldom systematically considered in traditional financial analysis. Through theory and case studies, Decision Options: The Art and Science of Making Decisions details how uncertainty and flexibility can be evaluated to assist in making better investment decisions in companies. Harnessing the author’s own software technology, the book supplies a tool set that enables the incorporation of uncertainty and flexibility in investment decisions up front without being too complex.

After a qualitative introduction to decision options, the author covers private and market risks, including how risks relate to decisions and the use of stochastic processes to represent risks. He then presents self-standing options, such as financial options and options pricing theory; describes how decision options are different from single-standing financial options; and deals with a special case of decision options in pricing employee stock options. The next several chapters focus on various case studies of practical applications of decision options. The book also explores common misperceptions around the term real options and the impediments that currently exist in large companies for the systematic practice of decision options.

Providing rigorous methods to use when making decisions, this book helps readers reduce the time and effort needed to reach decisions and build consensus, improve decision fidelity and communication, and enhance the value of their enterprise.

420

2009-08-26T04:06:00.001+02:00

Filmed on my birthday, which, I found today is some kind of holiday :)

Heartbeats pt.2

2009-08-22T03:00:00.001+02:00

No Nos Pararan

2009-08-18T00:56:00.001+02:00

Golden Girl

2009-08-14T21:26:00.001+02:00

Options options options 8)

2009-08-11T19:38:00.001+02:00

141 West Jackson: A journey through trading discoveries

2009-08-10T00:23:00.001+02:00

141 West Jackson: A journey through trading discoveries (Hardcover)by J. Peter Steidlmayer

Studies of the commodities markets consistently show that 85% of all traders lose. I've begun trading stocks in the last couple of years, and interestingly, if you measure the results of stock mutual funds versus a standard index, the success ratio is similar: approximately 85% of all stock funds failed to beat the S&P last year. The "trading" activity in a stock fund is stock picking. It is quite revealing that while most commodity traders are technically oriented, and most stock pickers rely mostly on fundamentals, their trading results are quite similar.

Why do such diverse approaches lead to equally sub-par performances? What is the common denominator? The answer that I initially gave myself, and which I still believe is correct, has to do with understanding, particularly in terms of market background. The programs of both types of traders seem to eclipse background; in the case of the technical trader, with financial controls; in the case of the fundamentally based trader, with a belief in projection.

A trader must try to understand a market in the present, rather than attempting to predict the future. I think that what follows in this book will go a long way towards solving this problem. The crux of why people are losing is that they are using the wrong database, one that actually inhibits the necessary insights from developing, and thus blocks them from learning about the markets...

...A great deal has been learned about markets since 1982, when the original version of the Market Profile data management and analysis system was first formalized. The initial effort was based on the notion that the bell curve, a fundamental organizing principle in statistical analysis, would have some important relationship to market behavior. While not perfect, the first version was successful enough to inspire an ongoing quest to understand more. Progress was incremental and relatively slow, as learning came from observation and experience, contributed to by many people in an open process of exploration, discussion, and discovery.

Many of the key formats used in organizing the data were fortunate discoveries that proved to have important ramifications far beyond what we intended when we first developed them. When we went back to try to understand why the formats worked so well, we were led to the operating principles of the market. The original formats, which were based on an intuitive understanding of trading, had in them the seeds of the formal knowledge we were seeking. It took 15 years of working with Market Profile to develop all the insights. Towards the end, progress was greatly accelerated by using a computer to do the processing, allowing us to work out and verify our ideas on many more markets than we could have dealt with by hand. In fact, bringing the computer into the world of trading has accelerated the flow of information and hence the evolution of the markets and of trading methods in general. With the new database, the computer allows quicker forward movement. Change allows for the success of people just entering the markets, as a new technique always offers opportunity to the new person.

Our most important innovation was the data entry system itself. Its key advantages were that it allowed us to get away from using chronological time as a basis for organizing our data, and forced a two-dimensional data representation, giving us a vertical base for data processing. This system got the effort of data organization off on the right foot and gave us a solid basis for going forward.

Over time, the data entry system evolved from daily profiles into profiles organized around market events, and finally to a database of smallest meaningful data units. The system accomplished the graphic capture and display of the market in a two-dimensional setting that reflects the underlying market processes. This is a clear prerequisite for obtaining objective measurements that define the state of the market, and thus the opportunities that may be present. Markets measured means markets defined. Defining your opportunities in terms of market measurements is as close as you need to be…

Fuzziness and Approximate Reasoning

2009-08-10T00:04:00.001+02:00

Fuzziness and Approximate Reasoning: Epistemics on Uncertainty, Expectation and Risk in Rational Behavior (Studies in Fuzziness and Soft Computing) by Kofi Kissi Dompere

This monograph is special in its orientation and contribution to current state of our understanding of decision-choice process and knowledge production. Its special orientation is to bring to the scientific community the discussions on the epistemic structure of the relationships among uncertainty, expectations, risk, possibility, probability and how the rules of fuzzy paradigm and the methods of fuzzy rationality bring new and different understanding to the relationships. At the level of theory of knowledge, it presents the structure and epistemic analysis of uncertainty, expectations and risk in decision-choice actions through the characteristics of substitution-transformation and input-output processes in categorial dynamics of actual-potential duality. The interactive effects of rationality and expectation are examined around belief, prospect, time and conditions of belief justification where the relationship between possibility and probability as a sequential link between potential and actual is analyzed to provide some understanding of the role of relative costs and benefits in defining risk in both nature and society. The concepts of possibilistic and probabilistic beliefs are explicated in relation to rationality and the decision-choice process where the analytical relationship between uncertainty and expectation formation is presented leading to the introduction of two types of uncertainty composed of fuzzy uncertainty and stochastic uncertainty.

The Mathematical Theory of Minority Games:

2009-08-09T23:59:00.001+02:00

The Mathematical Theory of Minority Games: Statistical Mechanics of Interacting Agents (Oxford Finance) (Hardcover) by A.C.C. Coolen

Minority games are simple mathematical models initially designed to understand the co-operative phenomena observed in markets. Their core ingredients are large numbers of interacting decision-making agents, each aiming for personal gain in an artificial 'market' by trying to anticipate (on the basis of incomplete information, and with an element of irrationality) the actions of others. Gain is made by those who subsequently find themselves in the minority group, e.g. those who end up buying when most wish to sell or vice versa. Aimed at researchers and students in physics, mathematics and economics, as well as financial practitioners, this text describes the mathematical theory of Minority Games from a statistical mechanics viewpoint. It provides a detailed and explicit introduction to the advanced mathematical analysis of these models, describes the potential and restrictions of physical methods in solving agent based market models, and outlines how different mathematical approaches are related.

If Ye

2009-08-08T16:19:00.001+02:00

C'etait un Rendezvous

2009-07-30T17:23:00.001+02:00

Ferrari 275 - Claude Lelouch sélectionné dans Court métrage

Everyman

2009-07-28T06:59:00.001+02:00

Sisters love - Give me your love

2009-07-26T10:41:00.001+02:00

Also sprach Zarathustra

2009-07-24T07:42:00.002+02:00

Chance is that Being There is what matters!

Why Sex Matters: A Darwinian Look at Human Behavior

2009-07-23T12:47:00.001+02:00

by Bobbi S. Low

This book is not as formidable a reading challenge as might be supposed on first perusal. True it is 412 pages long, but the back matter begins with the footnotes on page 258. There follows a glossary, a 57-page bibliography, an author index and a subject index. Also, even though this is clearly an academic tome written by a professional ecologist who is not about to compromise her standing in the scientific community for a shot at popular success, Professor Low nonetheless employs a readable and common sense approach with a minimum of unnecessary jargon. Furthermore, what she has to say is exciting and relevant to our lives, and we can see that she cares as much about communicating to the reader as she does about pleasing colleagues. Reading Why Sex Matters is consequently one very engaging experience.

Low, who is a professor of ecology at the University of Michigan, assumes the point of view of an evolutionary biologist as she asks the question, how are men and women different and why? She is particularly focused on how the sexes differentially use resources to further reproduction, and asks which behaviors are ephemeral, due to present conditions, and which are more enduring, having proven adaptive over longer periods of time and in differing environments. She faces squarely the unsettling feeling that some people get when they contemplate humans purely as biological entities--or "critters," to use her expression. As she tells us in the preface, there are three themes guiding her work: One, "resources are useful in...survival and reproduction"; two, "the sexes...differ in how they...use resources"; and three, "each sex accomplishes these ends" by reacting to the environment differently. The result of this structured approach is a clear introductory course in sexuality from an evolutionary point of view, and a fascinating read.

Because Low employs resources from a wide variety of disciplines, including sociobiology, evolutionary psychology, behavioral genetics, ecology, anthropology, sociology, biology, history, etc., not to mention pop culture and world literature, her work is highly persuasive in a scientific sense. And because she studiously avoids squabbling among the disciplines, her work is psychologically compelling. There is material on cultural transmissions as well as natural selection. Demographers are given currency along with evolutionary biologists. One gets the sense that she has read just about everything and has thoroughly evaluated what she has read. Particular interesting to me is her discussion of the tangled origins of sexuality and the (non-obvious) nature of altruism. The chapters on warfare, "Sex, Resources, and Early Warfare," and "The Ecology of Warfare" are worth the price of the book alone. There we see that women warriors are rare because men can gain reproductive advantage through warfare but women cannot (p. 216). Low suggests that war may be an example of "runaway sexual selection" and its practitioners may have become "unhooked" from the old reproductive rewards, but that the proximate rewards remain. Low soberly faces the prospect of future warfare when small groups of people may acquire monstrous weapons, noting that "given a short-term gain...versus an unspecifiable risk of nuclear warfare...in the future, we do not predict restraint."

It should be clear that Low is a professional academician and not a journalist, as some popular writers on evolution are (Matt Ridley and Robert Wright, to name two of the best), and as such careful about her assertions. She doesn't espouse pet theories that may be overturned tomorrow; but she isn't afraid to voice her opinion. To give you a sense of her careful style, note the stunning qualification in the parenthetical in this statement from page 217 (and the sly irony): "Human war can become more complex and varied than intergroup aggression in other species, largely as a result of the development of technology (which itself is probably a product of intelligence)." Probably, indeed!

In the chapter on "Politics and Reproduction" we learn that men seek political power for reproductive gain (p. 211) but in the modern nation state may have to settle for proximate gains (which may be an irony not lost on Bill Clinton). Women, however, can gain little or no reproductive advantage directly for themselves, which may be the reason there are relatively few women in the top positions of political power in most human societies.

Some of this I admit is tough going. The material on "The Group Selection Muddle" in Chapter Nine is still muddled in my mind, and I couldn't figure out the point of the Summary of Selection Theories (Table 9.1 on pages 156-157). But evolution and the disciplines that address human behavior are complex, in some ways, deceptively so.

Professor Low is wise, temperate, thorough and more objective than seems possible in such a vibrant and contentious academic field. I suspect that this book started out as an undergraduate text, but somewhere along the line those reading the manuscript realized that it was so interesting and valuable that it could be published as a trade book aimed at a general readership. If you have time to read only one book on human nature, read this one. You will learn more than you would from half a dozen "popular" expositions, and you will have a sense of having learned something important and valuable. I wish I knew what is in this book when I was one and twenty. I would have conducted my life with a lot more grace and effectiveness.

Review by Dennis Littrell

Skeen

2009-07-22T01:59:00.001+02:00

Habit

2009-07-19T22:46:00.001+02:00

I am your constant companion.
I am your greatest helper or your heaviest burden.
I will push you onward or drag you down to failure.
I am completely at your command.
Half the things you do, you might just as well turn over to me,
and I will be able to do them quickly and correctly.
I am easily managed; you must merely be firm with me.
Show me exactly how you want something done, and after a few lessons I will do it automatically.

I am the servant of all great men.
And, alas, of all failures as well.
Those who are great, I have made great.
Those who are failures, I have made failures.
I am not a machine, though I work with all the precision of a machine.
Plus, the intelligence of a man.
You may run me for profit, or run me for ruin; it makes no difference to me.
Take me, train me, be firm with me and I will put the world at your feet.
Be easy with me, and I will destroy you.
Who am I?

I am a HABIT!

The Mobius Strip: Dr. August Mobius's Marvelous Band in Mathematics, Games, Literature, Art, Technology, and Cosmology

2009-07-19T20:45:00.001+02:00

by Clifford A. Pickover

The Mobius strip, the object, is itself seemingly simple. To make one is easy: take a strip of paper, give one end a half twist, and join the two ends together. The result is a loop with remarkable properties. It has only one edge and only one side. There is also a three-dimensional analog of the Mobius strip, the Klein bottle. It has only one surface. Any liquid placed in a Klein bottle coffee mug is both inside and outside the mug at the same time, as is everything in the Universe.
The Mobius Strip, the book, explores the properties of the Mobius strip as well as other topological topics, knots, higher dimensional objects, and stories and films in which space-time is looped. Pickover details the life of August Mobius and his scientific accomplishments. Interestingly, Mobius's work on the strip named for him was not published until after his death. Far from being just a mathematical curiosity, the Mobius strip is the basis for many inventions. Each chapter in the book starts with a diagram taken from a United States patent that uses the strip in some manner.
Pickover injects his own imaginative take on the meaning of the strip. For example, he supposes a town in which the bicycle path takes you around a Mobius route in such a way that you return to the start with your left and right sides reversed. It takes two trips around the path for you to get back to the way you were when you started, Interestingly, the spin-1/2 sub-nuclear particles share this characteristic. Perhaps electrons and protons are very small Mobius strips.
In this volume, the author builds upon his previous mathematical works, Wonders of Numbers, and A Passion for Mathematics. There are puzzles for each chapter. This book focuses on topological subjects, but also includes the human side of the story. It is infused throughout with Pickover's unique view of reality. While, there are a few esoteric equations, these can be skipped without loss by those who are so inclined. This is perhaps Pickover's best and most interesting work combining fascinating mathematics with the history of its creation. More biographical sketches can be found on his "Six Thousand" web site where he profiles creative artists, writers, scientists, and other thinkers.

Review by Paul Moskowitz

Decision Theory: Principles and Approaches

2009-07-16T18:59:00.001+02:00

by Giovanni Parmigiani , Lurdes Inoue

Decision theory provides a formal framework for making logical choices in the face of uncertainty. Given a set of alternatives, a set of consequences, and a correspondence between those sets, decision theory offers conceptually simple procedures for choice. This book presents an overview of the fundamental concepts and outcomes of rational decision making under uncertainty, highlighting the implications for statistical practice.

The authors have developed a series of self contained chapters focusing on bridging the gaps between the different fields that have contributed to rational decision making and presenting ideas in a unified framework and notation while respecting and highlighting the different and sometimes conflicting perspectives.

This book:

-Provides a rich collection of techniques and procedures.
-Discusses the foundational aspects and modern day practice.
-Links foundations to practical applications in biostatistics, computer science, engineering and economics.
-Presents different perspectives and controversies to encourage readers to form their own opinion of decision making and statistics.

Decision Theory is fundamental to all scientific disciplines, including biostatistics, computer science, economics and engineering. Anyone interested in the whys and wherefores of statistical science will find much to enjoy in this book.

Scientific Discovery: Computational Explorations of the Creative Processes

2009-07-12T14:20:00.001+02:00

by Pat Langley , Herbert A. Simon , Gary L. Bradshaw , Jan M. Zytkow

Computational philosophy of science will define twenty-first philosophy of science, and it has already started. This book by Herbert Simon, Nobel laureate and one of the founders of artificial intelligence, describes several computerized discovery systems created under Simon's direction at Carnegie-Melon University in the 1980's.

In his book titled Novum Organon Francis Bacon had expressed the view that with a few easily learned rules or a method it may be possible for anyone undertaking scientific research to be successful. Today Bacon's agenda is called proceduralization for computerized mechanization, and it is appropriate therefore that one of the most extraordinary discovery systems - Pat Langley's - should be named BACON.

The BACON discovery system is actually a set of successive and increasingly sophisticated discovery systems that make quantitative empirical laws and theories. Given sets of observation measurements for two or more variables, BACON searches for functional relations among the variables. The original version was designed and implemented by Pat Langley in 1979 as the thesis for his Ph.D. dissertation at Carnegie-Mellon department under Simon's direction.

System BACON has rediscovered several historically significant empirical laws including Boyle's law of gases, Kepler's third planetary law, Galileo's law of motion of objects on inclined planes, Boyle's ideal gas law, Coulomb's law of electrical current, Ohm's law of electrical circuits, Archimedes law of displacement, Black's law of specific heat, Newton's law of gravitation, the law of conservation of momentum, and the laws describing chemical reactions formulated by Dalton, Gay-Lussac, and Comizzaro.

Other discovery systems also described in this book are: System GLAUBER named after the eighteenth century chemist, Johann Rudolph Glauber, who contributed to the development of the acid-base theory. System STAHL named after the German chemist, Georg Ernst Stahl, who developed the phlogiston theory of combustion. System DALTON named after John Dalton, who developed the atomic theory of matter.

Readers interested in more commentary on Simon are invited to Google my book titled History of Twentieth-Century Philosophy of Science at my com web site named philsci on the Internet for free downloads.

Thomas J. Hickey

A LITTLE BIT OF JAZZ

2009-07-11T21:01:00.001+02:00

Linear Causal Modeling with Structural Equations

2009-07-11T20:53:00.001+02:00

by Stanley A. Mulaik

Stressing causation as a functional relationship between variables, this book presents the fundamentals of structural equation modeling, including concepts from Bayesian graph theory, path tracing rules for variances and covariances, equivalent models, and instrumental variables. It provides applications to confirmatory factor analysis, multilevel models, longitudinal models, and nonrecursive models. In addition, the author discusses parameter estimation beyond the basics of nonlinear optimization algorithms; addresses polychoric and polyserial correlation; and offers an extensive survey of various goodness-of-fit indices, evaluating their limitations and strengths.

Goldman Code Theft BOMBSHELL?

2009-07-09T15:25:00.001+02:00

taken from:market-ticker

Posted by Karl Denninger in Regulatory at 15:03

Something really ugly popped up on Daily Kos yesterday late in the afternoon.....

...GS, through access to the system as a result of their special gov't perks, was/is able to read the data on trades before it's committed, and place their own buys or sells accordingly in that brief moment, thus allowing them to essentially steal buttloads of money every day from the rest of the ~~punters~~ world.

Two things come out of this:

1. If true, this should be highly illegal, and would, in any sane country result in something like what happened to Arthur Andersen...

(2. ... is way off point....)

God help Goldman if this is true and the government goes after them. This would constitute massive unlawful activity. Indeed, the allegation is that Goldman alone was given this access!

God help our capital markets if this is true and is ignored by our government and regulatory agencies, or generates nothing more than a "handslap." Nobody in their right mind would ever trade on our markets again if this occurred and does not result in severe criminal and civil penalties.

There apparently is reason to believe that Sergey might have been involved in exactly this sort of coding implementation. Specifically, look at the patent claims cited on DailyKos; his expertise was in fact in this general area of knowledge in the telecommunications world......

This is precisely the sort of thing that a Unix machine, sitting on a network cable where it can "see" traffic potentially not intended for it, could have an interface put into what is called "promiscuous mode" and SILENTLY sniff that traffic!

ASSUMING THE TRAFFIC IS PASSING BY THE MACHINE ON THE WIRE THIS IS TRIVIALLY EASY FOR ANY NETWORK PROGRAMMER OF REASONABLE SKILL TO DO. IF THAT TRAFFIC IS EITHER UNENCRYPTED OR IT IS EASY TO BREAK THE ENCRYPTION.....

Folks, I have no way to know what the code in question does, but if there's anything to this - anything at all - there is a major, as in biggest scam of the century - scandal here - something much, much bigger than Madoff or Stanford.

What would this mean, if it was all to prove up?

It would mean that Goldman was able to "see" transaction order flow - bid, offer, and execute messages - before they were committed in the transaction stream. Such a "SNIFF" would be COMPLETELY UNDETECTABLE by the sender or recipient of the message.

The implication of this would be that they would be able to front-run any transaction where the data was visible to them, thereby effectively "stealing pennies" from each transaction they were able to front-run.

Again: I have absolutely nothing on the content of the allegedly-stolen code nor can I validate the claim made that Goldman had "special network access." Nothing. All I have to go on with regards to "market manipulation" (which such a program would be, writ large!) is the statement of the US Attorney that I cited in my earlier Ticker.

This may be nothing more than a crazy conspiracy theory put out by someone at Daily Kos. But consider the following:

The last few days the the market has traded "organically." I and many other market participants have noted that prior to the week before July 4th the market had been acting "very odd" - normal correlations between interest rate, foreign exchange the the stock markets had been on "tilt" for the previous couple of months, with the amount of "tiltage" increasing dramatically in the last three or four weeks. In fact, many of my usual indicators that I use for daytrading had become completely useless. Suddenly, just before the July 4the weekend, everything started correlating normally again. I have no explanation for this "light-switch" change but it aligned almost exactly with the day the NYSE had "computer problems" and extended trading by 15 minutes. Was there a configuration change made to their networking infrastructure, one asks?

Zerohedge's information, if you believe it, seems to point toward some sort of distortion. The cite above claims statistically "as likely as an asteroid hitting earth it is not true" proof of distortion in the market. I have not analyzed the data to independently validate that conclusion, but even if the odds of these "effects" in the market being random chance are only as good as getting hit by a tornado this afternoon......

Every market participant deserves answers on this point. Specifically to the NYSE and all other markets where colocation connections are made and allowed:

Was it possible for message traffic to be "seen" by computers on your network and colocated into your infrastructure by other than the originator and recipient? That is, was it physically possible for anyone to "sniff" messages to and from other market participants.
If it was possible, is it no longer possible, and if so, when was that change made?

I believe the SEC and FBI must direct a subpoena at all market exchanges for an under-oath answer to question #1. If the answer to that question is "yes" then every market participant who had or has equipment colocated on the NYSE infrastructure must be immediately served with a subpoena for a true and complete copy of all software operating on every machine connected to said infrastructure for immediate forensic investigation to ascertain if any participants were indeed "sniffing" traffic and front-running orders.

The charge made on the pages of Daily Kos is incredibly serious. If this happened it is a case of literal robbery of every market participant for the entire duration of the time that the code in question was executing on the network, with losses to market participants potentially running into the hundreds of billions of dollars.

Market participants deserve an answer to these questions.

Sunthroughclouds

2009-07-05T16:57:00.001+02:00

When torrential water tosses boulders, it is because of its momentum. When the strike of a hawk breaks the body of its prey, it is because of timing.

Heartbeats

2009-07-02T05:04:00.001+02:00

THE KNIFE - Heartbeats
by The_Knife

Fortune's Formula

2009-07-01T11:23:00.001+02:00

Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street by William Poundstone

This is an excellent book about the discovery of the Kelly formula that is unknown outside gambling. This story has three protagonists. Two of them were scientists working at Bell Labs: Claude Shannon, a genius polymath who developed information theory; and John Kelly, a maverick genius, who is directly responsible for the development of Kelly's formula. The third one is a brilliant MIT mathematician, Ed Thorp.

Ed Thorp tested the Kelly formula in both gambling and investing. Also, he came up with an options formula before Fischer Black and Myron Scholes. His formula missed a risk-free rate component due to the structure of the market at the time. As a result, Ed Thorp remained in obscurity while Black and Scholes became famous.

Ed Thorp succeeded in deriving superior returns in both gambling and investing. But, it was not so much because of Kelly's formula. He developed other tools to achieve superior returns. In gambling, Ed Thorp succeeded at Black Jack by developing the card counting method. He just used intuitively Kelly's formula to increase his bets whenever the odds were in his favor. Later, he ran a hedge fund for 20 years until the late 80s and earned a rate of return of 14% handily beating the market's 8% during the period. Also, his hedge fund hardly lost any value on black Monday in October 1987, when the market crashed by 22%. The volatility of his returns was far lower than the market. He did this by exploiting market inefficiencies using warrants, options, and convertible bonds. The Kelly formula was for him a risk management discipline and not a direct source of excess return.

Ed Thorp's career as a hedge fund manager was temporarily cut short. This was due to his fund being involved in a tax-avoiding securities scheme with Drexel Burnham. Thorp was not guilty; but, the fund had to be liquidated. The author stated many of Milken wrongdoings. One included getting large equity positions attached to the junk bonds he issued. The companies thought they were issuing convertible bonds. However, the equity component went straight into Milken's pocket as he sold the bonds to investors as high yield debt with no equity attached.

Ed Thorp rebounded from this mishap and started a second hedge fund in 1994. Thorp continued reaping above market return. As the author states, Ed Thorp's genius consists in "...his continuous ability to discover new market inefficiencies ... as old ones played out." Ed Thorp closed this second fund in 2002. He is now independently exploring inefficiencies in gambling.

Claude Shannon amassed large wealth by recording one of the best investment records. His performance had little to do with Kelly's formula. Between 1966 and 1986, his record beat even Warren Buffet (28% to 27% respectively). Shannon strategy was similar to Buffet. Both their stock portfolios were concentrated, and held for the long term. Shannon achieved his record by holding mainly three stocks (Teledyne, Motorola, and HP). The difference between the two was that Shannon invested in technology because he understood it well, while Buffet did not.

John Kelly was a chain smoking, gun collecting brilliant physicist. He died young at 41 of an aneurysm. He worked closely with Shannon at Bell Labs. Besides being a charismatic character the author does not write much about his life compared to the other two (Shannon and Thorp).

The Kelly formula is Edge/Odds (as explained on page 72). In investment circles, this formula is not always useful because it is hard to quantify your Edge (value of proprietary information). However, Kelly's formula has intuitive practical implications. It entails you should focus on an investment internal rate of return (IRR) instead of its average yearly return. The IRR is always less. Another implication is that higher risk is not always compensated by higher return. There is an optimal risk level beyond which risk taking becomes destructive. The author mentions the Long Term Capital Management as a case in point.

I recommend other excellent similar books: "Fischer Black and the Revolutionary Idea of Finance" by Perry Mehrling, and "When Genius Failed. The Rise and Fall of Long Term Capital Management" by Roger Lowenstein. Both these books describe luminaries in finance and investment fields who were often in contact with Ed Thorp and Claude Shannon. Another excellent book is Sylvia Nasar's "A Beautiful Mind" about John Nash, the Game Theorist.

review by Gaetan Lion

Teardrop

2009-06-08T17:18:00.001+02:00

http://www.yooouuutuuube.com/v/?rows=24&cols=24&id=9B-h1EEsKDA&startZoom=1

Fluid Concepts And Creative Analogies

2009-06-07T14:12:00.001+02:00

Fluid Concepts And Creative Analogies: Computer Models Of The Fundamental Mechanisms Of Thought by Douglas R. Hofstadter

Revew by A. Linhares

Where does meaning enter the picture in artificial intelligence? How can we say that a machine possesses understanding? Where, and how, does such understanding happen? These are among the deepest and hardest questions faced by the field, which, as many skeptics claim, has not yielded much about them so far. Consider, for instance, that most current research in AI can be roughly classified over two distinct classes:

(1) Low-level perception. The best example of this type of work comes obviously from computer vision systems. These systems, given a set of input images, usually extract some important information from this input, generating, well, other images (i.e. depth image, edge contours etc.). But this extracted information is usually on a still very low, meaningless, level, to be used by, for instance, a theorem-proving system. To make it clear to all readers what is meant by "meaning", consider the information-processing that must occur whenever an animal, given its massive sensorial information, perceives danger. Going from a set of images and sounds to a feeling of danger involves extracting meaning from the original input, and this is not what is done by current low-level perception projects. It is almost as if these perceptual processes "delegate" the extraction of meaning to another upcoming process. To get into the meaning of a situation, low-level perceptual processes are not enough; there is a clear need for further perceptual processing.

(2) GOFAI symbolic manipulation. This is the other side of the AI coin, dubbed by philosopher John Haugeland as GOFAI, for "good-old-fashioned artificial intelligence", where programs usually handle (syntactically) a representation that supposedly should have been formed by a perceptual process. These systems, such as theorem-proving systems, chess playing, and others, do perform some impressive feats, but they do not have a clue about the semantics of their symbol manipulation. As an example, consider the following predicate-calculus statement: (philosopher (Socrates)). We all fully understand what that means, but what about the machine that executes it? Does it have any meaning to the machine? It is obvious that the answer is no, for that is just a syntactic symbol, as meaningful to the computer as (XzE (GgGggGG)), which doesn't mean anything. But how can a system that only manipulates meaningless syntactic symbols posses any meaning on those symbols? This seems to be an intrinsic problem to GOFAI projects.

Both of these avenues of AI research seem to be based on an unspoken hypothesis of a "center of meaning" arising in the brain (maybe the mind's eye?). The low-level perceptual processes should operate on information that has yet to reach such place, and GOFAI systems in turn handle information that seems to have long reached it. The problem is, what happens at the point of crossing the line? Nobody really knows.

Maybe, then, there is no such line after all - as Hofstadter clearly considers as true, by presenting us with an original alternative. His main thesis is based on the idea that meaning comes from an emergent process that combines perception with analogy-making. He argues, following philosopher Immanuel Kant, that perceptual processes are inseparable from high-level cognitive processes, and, moreover, that (1) perception is guided by analogy-making, and (2) this analogy-making process is itself derived from perception. This thesis has profound implications for AI.

In his systems, perceptual observations activate concepts, and these activated concepts in turn guide (probabilistically) further perceptual observations. Hofstadter and his group resurrect the HEARSAY II architecture and extend it to other pattern-analysis domains. There is a mixture of bottom-up and top-down processing that eventually leads to the understanding of a situation arising as a combination of "platonic" concepts. This iterative (perception/analogy mapping) process gradually develops a coherent view of the context of the problem it is working on, and that view constitutes, in a sense, on the extracted meaning of the problem. We can say that "understanding p" is, in a sense, "to know what p is like", and this "what p is like" information comes from such analogy-mapping.

Not surprisingly, his projects cannot be found on the symbolic versus connectionist menu. Hofstadter points out that GOFAI (symbolic) systems are too optimal, too rational to be psychologically realistic (he calls them "the Boolean dream"), and that, on the other hand, connectionist systems operate on a level "too low" to be relevant, at present, to a greater understanding of the cognitive issues. Obviously, all mental phenomena may be reducible to a connectionist-system level, but, then again, these same phenomena will be reducible to a quantum physics level. What we should strive for at the moment, he argues, is the right level on which to conduct research. And that level may just be the level of the HEARSAY II speech-understanding system.

Probably the most ambitious AI project under development today is the Letter Spirit project, described on the last chapter. Striving to develop a system that deserves credit for its own creations, with a sense for esthetics, with true creativity and true style - almost taboo issues in AI -, this project messes with many important topics that lack serious study. And, just in case a skeptical reader is wondering, "but, doesn't the project X mess with these exact issues?", then, well, I would recommend Hofstadter's own criticism of "related" projects, given on the epilogue "On Computers, Creativity, Credit, Brain Mechanisms, and the Turing Test".

In summary, this is not your average AI book. This is a full redefinition of artificial intelligence, on a class of its own, an excellent book that deals with deep issues largely ignored by the AI community. Like all the great AI books, this one shuffles between philosophy, methodology, and architecture. Some, maybe even most, highly established AI researchers will not comprehend it completely -- they'll never realize its full scope. However, it is highly recommended to Graduate Students on AI (though not as an introduction to the field). It also seems to be making its mark among philosophers, and I think that neural network researchers will appreciate it as well, for, by extending the HEARSAY II architecture to other domains, it presents an alternative (emergent) architecture that brings us much closer to understanding what understanding is all about.

My Manhattan Project

2009-06-06T15:47:00.001+02:00

How I helped build the bomb that blew up Wall Street.

…I started on Wall Street on October 5, 1985. I was 30 years old and had been writing software for six years. I originally got into it when my wife became ill and I took a job entering data, the bottom of the computer industry, at Emory University, so her rare kidney ailment could be treated. Before that, I had risked my life for $200 a week hauling shrimp 100 miles offshore from Cape Canaveral, and I had been the only white boy in my crew digging ditches in Alabama. Compared to all that, Wall Street was a country club. I recall my first day at Salomon Brothers, lingering at the windows by the elevator banks on the 25th floor of 55 Water Street. While groups of the well dressed and the professionally coiffed headed to their cubicles and offices, I stared out at the harbor, watching freighters, tankers, ferries, and garbage scows cross the great harbor. The perfection of the place was profound, the feng shui was palpable. As John Gutfreund, then the CEO, expected, I was ready to grab the balls of the bear…

Ice Cream

2009-05-21T23:06:00.001+02:00

BRK

2009-05-20T12:50:00.001+02:00

…The Black-Scholes formula has approached the status of holy writ in finance, and we use it when valuing our equity put options for financial statement purposes. Key inputs to the calculation include a contract’s
maturity and strike price, as well as the analyst’s expectations for volatility, interest rates and dividends.
If the formula is applied to extended time periods, however, it can produce absurd results. In fairness,Black and Scholes almost certainly understood this point well. But their devoted followers may be ignoring
whatever caveats the two men attached when they first unveiled the formula.
It’s often useful in testing a theory to push it to extremes. So let’s postulate that we sell a 100- year $1 billion put option on the S&P 500 at a strike price of 903 (the index’s level on 12/31/08). Using the implied
volatility assumption for long-dated contracts that we do, and combining that with appropriate interest and dividend assumptions, we would find the “proper” Black-Scholes premium for this contract to be $2.5 million.
To judge the rationality of that premium, we need to assess whether the S&P will be valued a century from now at less than today. Certainly the dollar will then be worth a small fraction of its present value (at only
2% inflation it will be worth roughly 14¢). So that will be a factor pushing the stated value of the index higher.
Far more important, however, is that one hundred years of retained earnings will hugely increase the value of most of the companies in the index. In the 20th Century, the Dow-Jones Industrial Average increased by about 175-fold, mainly because of this retained-earnings factor.

Considering everything, I believe the probability of a decline in the index over a one-hundred-year period to be far less than 1%. But let’s use that figure and also assume that the most likely decline – should one
occur – is 50%. Under these assumptions, the mathematical expectation of loss on our contract would be $5 million ($1 billion X 1% X 50%).
But if we had received our theoretical premium of $2.5 million up front, we would have only had to invest it at 0.7% compounded annually to cover this loss expectancy. Everything earned above that would have
been profit. Would you like to borrow money for 100 years at a 0.7% rate?
Let’s look at my example from a worst-case standpoint. Remember that 99% of the time we would pay nothing if my assumptions are correct. But even in the worst case among the remaining 1% of possibilities – that
is, one assuming a total loss of $1 billion – our borrowing cost would come to only 6.2%. Clearly, either my assumptions are crazy or the formula is inappropriate.

The ridiculous premium that Black-Scholes dictates in my extreme example is caused by the inclusion of volatility in the formula and by the fact that volatility is determined by how much stocks have moved around
in some past period of days, months or years. This metric is simply irrelevant in estimating the probability weighted range of values of American business 100 years from now. (Imagine, if you will, getting a quote every day on a farm from a manic-depressive neighbor and then using the volatility calculated from these changing quotes as an important ingredient in an equation that predicts a probability-weighted range of values for the farm a century from now.)
Though historical volatility is a useful – but far from foolproof – concept in valuing short-term options, its utility diminishes rapidly as the duration of the option lengthens. In my opinion, the valuations that the Black-Scholes formula now place on our long-term put options overstate our liability, though the overstatement will diminish as the contracts approach maturity.
Even so, we will continue to use Black-Scholes when we are estimating our financial-statement liability for long-term equity puts. The formula represents conventional wisdom and any substitute that I might
offer would engender extreme skepticism. That would be perfectly understandable: CEOs who have concocted their own valuations for esoteric financial instruments have seldom erred on the side of conservatism. That club of optimists is one that Charlie and I have no desire to join…

In Tune WM

2009-05-08T17:03:00.001+02:00

I love (to eat) animals

2009-04-27T02:20:00.001+02:00

Whatever you do , don’t press stop button! :)

Best Man Fail

2009-04-24T01:12:00.001+02:00

Thinking and Deciding

2009-04-18T13:16:00.001+02:00

by Jonathan Baron

Review by Herbert Gintis

This is the fourth edition of Jonathan Baron's very popular textbook on decision-making and thinking. The text is inspired by, and develops carefully and in an entertaining manner, the basic theories and experimental results of Daniel Kahneman, Amos Tversky, George Loewenstein, Paul Slovic, and others in the "heuristics and biases" tradition. This school of thought is only 35 years old, but it has radically transformed our knowledge of human decision-making. The material is inherently engaging, and students love to study it. This is an excellent book, and fully covers the subject material, except for graduate students who plan to work in this area, who should read the primary material on which this book is based. It is also great for self-study by the curious lay reader.

Let me say at the outset that the negative reviews of this book are totally unwarranted. One is just the ranting of a persons who cannot give reasons, but only throw out unsupported, idiosyncratic, judgments. Another is by a reader with an ax to grind concerning philosophical issues in probability theory that are completely tangential to the purposes of this book I think these commentators would do well to withdraw their useless and diverting comments.

Baron is a talented experimenter in his own right, although in the book he limits his material almost exclusively to the works of the Old Masters, Kahneman et al. His own contribution is on an interpretive level. First, his basic model of human behavior is what he calls the "search-inference" model, which turns out to be the economist's "rational actor" model, in which decision-makers have preferences ("goals" in the search-inference terminology), beliefs, and constraints, and act to maximize utility (goal-attainment) subject of constraints. Baron defines "rational thinking" as "whatever kind of thinking best helps people achieve their goals." (p. 61) This, of course, is precisely the definition of rationality in the rational actor tradition in decision-theory. Of course, "preferences" are more specific than "goals," and it is not clear to me whether "rational" in Baron's sense includes achieving goals that are welfare-reducing (e.g., substance abuse), whereas in the rational actor tradition, rationality has to do with the attainment of goals with no evaluation of the relationship between goals and personal welfare.

Baron introduces two normative notions which instructors will find useful. The first is the idea of "actively open-minded thinking," and the second is "multi-attribute utility theory." Together, they urge that decision-maker cast a wide net in evaluating alternatives before honing in on a particular choice. The examples illustrating the value of this approach are illuminating and helpful.

This book does not make clear that there has been a second wave of behavioral experiments, starting in the mid-1980's that focus less on isolated decisions, and more on decisions in a setting of strategic interaction, using game theory as a tool of experimental design. This new body of theory and evidence deals with fairness and justice, altruism, cooperation, insider-outsider interactions, and related themes, in a manner barely intimated in this book. The chapters on altruism, fairness, and moral reasoning, are at least fifteen years out of date, and should not be used in a classroom today. There is, of course, plenty of material in the book without using these chapters, for a whole course on decision-making and thinking, but for strategic interaction, cooperation, and conflict, a completely different set of readings are required---and perhaps a completely new course devoted exclusively to this material.

A major focus of this book is on biases in decision-making---human errors that are not simply random, but rather are consistently biased in a particular direction. For instance, in the Draw A Man diagnostic, clinicians systematically interpret big eyes on a patient's drawing as indicative of paranoia, despite the fact that no such statistical relationship has ever been found. Moreover, untrained students also make the same mistake, indicating that this judgment is a systematic error committed by many people. The tragedy is that the clinicians do not abandon their biases when faced with objective data.

While systematic bias is a very important phenomenon, Baron does not claim that the rational actor models used by economists, in which biases do not exist, are contradicted by the experimental evidence---a criticism that the heuristic and bias researchers are usually fond of leveling against economic theory. Rather, he says that effective decision-making is the rule, especially when the parameters of the decision problem are clear, and that we should approach the biases that arise in complex decision contexts as challenges that we can overcome if we have the proper decision-making protocols.

Why do economists ignore biases in decision making, while psychologists take them so seriously? The answer is that economists only care about individual decision-making because they need a model of individual behavior that they can aggregate to model the macro-economy. Moreover, they consider their most fruitful professional interventions not in helping people make better decisions, but rather in advising governments and firms how to manipulate such macroeconomic variables as tax, profit margins, and interest rates. Psychologists, by contrast, consider the individual, not society, as the focus of their ministrations. Hence they tend to ignore the enormous success of the rational actor paradigm in modeling social behavior, and rather focus on areas of vulnerability in individual decision-making, where professional interventions on the level of the individual can improve decision-making accuracy.

QED: The Strange Theory of Light and Matter

2009-04-17T21:51:00.001+02:00

by Richard P. Feynman

Review By Michael Wischmeyer

Enigma - this term best describes QED, the notoriously non-intuitive basis of fundamental physics. But 'enigma" equally applies to this book, QED. Why is it so popular? Four lectures on quantum electrodynamics? Why would anyone, other than a physicist, rave about such a book?

Feynman cautions the audience that they may not understand what he will be saying. Not because of technical difficulty, but because they may be unable to believe it, unable to accept what he is saying. "The theory of quantum electrodynamics describes Nature as absurd from the point of view of common sense. And it fully agrees with experiment. So I hope you can accept Nature as She is - absurd."

I long had this problem. I wanted to understand why, in addition to how nature works. I wanted some philosophical understanding, some underlying meaning. I have come to accept that the fundamental laws (rules, behavior, whatever) of physics are not intuitive, but are incomprehensible in terms of common sense.

To appreciate Feynman's QED lectures, you must have patience, some commitment (its not really difficult), but more than anything else you need a willingness to set aside disbelief and simply listen to a physicist talk about quantum electrodynamics. A willingness to accept that nature refuses to be understood. Analyzed, dissected, mathematically described (in a probabilistic sense), but not fundamentally understood. QED.

I am largely unsatisfied by books for laymen on quantum physics, string theory, cosmology, and the like. My background includes some physics and I find that a bit of mathematics is more helpful than a great many analogies, no matter how cleverly constructed. QED should have been disappointing. But I gave it five stars.

Feynman did not rely on analogies. He talks physics and experiments. Feynman had a wonderful clarity of thought, an ability to explain advanced physics, and all with a sense of humor. No math symbols, no complex numbers, no matrices, no wave mechanics, no advanced probability analysis - just simple addition of little arrows that shrink and turn.

Feynman was unpredictable. He saw the world in unexpected ways. In a footnote he mentions that Heisenberg's uncertainty principle is really no longer a necessary construct. "If you can get rid of all the old-fashioned ideas and instead use the ideas that I am explaining in these lectures - adding arrows for all the ways an event can happen - there is no need for an uncertainty principle." Heisenberg relegated to a footnote!

The casual reader may find some short sections a bit strenuous, particularly some of the more involved manipulations of arrows, but stay with it. As Feynman points out in the preface, these lectures represent physics accurately without distortions for simplicity. Nothing would need to be unlearned if you later majored in physics. Think about it. QED may lead you down a path heretofore not taken.

CHASING SHADOWS

2009-04-10T20:13:00.001+02:00

The Lifebox, the Seashell, and the Soul: What Gnarly Computation Taught Me About Ultimate Reality, the Meaning of Life, and How to Be Happy

2009-04-08T05:56:00.001+02:00

by Rudy Rucker

Review by Elderbear

This is one of the most fascinating books I have ever read. Rudy Rucker is an accomplished science fiction author and popularizer of mathematics and computer science. In this book he seems to bring together everything he has written in the past while playing with constructing a coherent world-view and philosophy of life. It works quite well. (Rucker is such a fascinating writer that my son was going to apply to San Jose State just to take classes from him. The book's revelation that Rucker is retiring disappointed my college-bound son and left him scrambling for other schools.)

Any description of this book with less complexity than the book itself will do the book an injustice. If you're a fan of Rudy Rucker, of infinity, or of mathematical and speculative philosophy, you MUST read this book. Students of the social sciences may have some difficulty wrapping their minds around the computational science ideas, but this book is an essential part of understanding what it means to be human.

Rucker has structured the book well. Each chapter is prefaced with a piece of micro fiction that illustrates the concepts to come. The chapters begin with an annotated outline that relates the concepts discussed. Ideas are reconnected with earlier mentions in the book as well as preceding ideas.

Rucker is not afraid to make novel combinations of philosophy, psychology, math, computer science, quantum physics, science fiction, and personal anecdotes. This is one of the best books produced for handling notes well. Turning to the back of the book for a note is generally rewarded with insights or speculations related to the text. Only occasionally is a note simply a bibliographic or web reference.

The book itself is a gnarly computation as well as a gnarly program for gnarled minds. It should be required reading for everybody who things they have a grip on life, the universe, or anything. If I could give it more than 5 stars, I would.