Posts Tagged ‘Statistics’

Too good not to share….you would think the public at large would notice something that big….guess not

Poor countries don’t need charity. They need justice.

Is this another deception with our perception of ‘The World’?

One of the most comprehensive reports into the real financial transfers into and out of the developing world shows that the extraction of wealth from the third world, much of it former colonies, continues apace.

Rich countries aren’t developing poor countries; poor countries are developing rich ones

How Poor Countries Develop Rich Countries

I find the fact that some $4trillion since 1980 is attributed to debt interest repayments fascinating. The scale of this particular transfer is testament to the continued servitude of many nations states.

When many times more is sent back in exchange for every dollar received in aid, does this not sound like a familiar profit making enterprise at work?

Reading the original report, I find this sentence especially on point…

Much improved statistical compilation and reporting is required in order to have a more adequate picture of global financial flows; a task that urgently needs to be undertaken collaboratively by the International Monetary Fund, World Bank, United Nations, Organization of Economic Cooperation and Development, and the Bank for International Settlements.

Is this a list of the usual suspect organisations?

 

As the new calendar year opens and the prior year draws to a close, many media slots are filled with both reviews of the past 12 months and predictions for the coming period.

In a year which has shattered any pretence, if there was indeed any in the first place, that certain qualified professionals have an innate ability to understand and predict future events and trends more so than those not so versed, I find it bewildering how the routine of setting predications continues apace.

Yet, nothings changes with the time and space given to these commentators. Does this suggest that we are simply suffering the fall out of the media’s own making?

Does it become a necessary exercise in futility that cannot be undone. People are paid to ply their trade, plenty of investors hoping to be the early bird yearn for such opinion, however what fundamentals change with the ticking of the clock past midnight on the 31st of December….none. Events occur at various moments, they may be game changers, or just another part of an ongoing trend, but until such time, why do many of us become caught up, entangled, in the futility of reviewing for only the sake of review? Until material events take place, should the consensus be the same from one small moment to the next?

With the amount of opinions available, getting the right outcome then becomes a sure fire way to earn a name for yourself…and then ensure others listen to you the next time. It will also set yourself apart from others and thus raise your status even further, allowing one to earn a greater share of the pie.

But the emphasis seems to be to write for the sake of writing, to pick winners or make new observations, not because anything has changed, but because of the need to make a statement, an observation or raise an issue not already discussed. Because the machine is too bloated and it needs more junk to feed on, many are only too pleased to oblige, and before we know it, we don’t have quality research on the market, we have noise. Distracting garbage probably not worth the paper its written on, something to separate the herd from the those with an eagle eye.

No-one can be right all the time, and no-one can rightly claim to know more than their peers. And yet in a year such as 2016 when eggs have been freely spread over the faces of our esteemed experts no such change is thought to be appropriate this time around.

Sometimes, less is needed, not more. Sometimes no comments are more insightful than the need to fill a void, to sell more observations to the detriment of the ordinary investor. I find a great connection here to the fact that even in an information age, with so much growing information at the tips of our fingers, we are arguably becoming ever more ignorant, being drowned in distraction not clarity. Look at the clamour of reporters trying to decipher from the tiniest inferences from Central Bank Governors as to the perceived direction of rates and the economy….there is just too much at stake not to be overzealous in this regard.

Will we think back to the remarkable number of events throughout modern history when the herd were quite disastrously wrong (EU Single Currency argument ?), or is this too just many people buying the trash up for sale. Perhaps we have never been accurate at all but the blurred reality shown to us is one that most experts get it right… mostly, but who’s really keeping check?

I wonder how the future will pan out…..let me see what those in the know are saying….?

 

 

 

I have linked here the latest article from Jim Rickards, touching on what he believes to be the next economic catastrophe. Note the quote below which illustrates his view of lessons not learned sufficiently from the causes of previous crises, and the disdain for perceived wisdom

The equilibrium and value-at-risk models used by banks will not foresee the new panic. Those models are junk science relying as they do on notions of efficient markets, normally distributed risk, continuous liquidity, and a future that resembles the past. None of those hypotheses match reality.

Advances in behavioural psychology have demolished the idea of efficient markets. The future does not resemble the past; it keeps getting worse

 

AI is not an upcoming trend to watch for. It is a reality becoming ever more present and considerably more powerful with each passing moment.

The following documentary by the acclaimed filmmaker Adam Curtis, only touches upon this in the wider context of his narrative, however I wish to focus particularly on his coverage of the asset management giant, BlackRock, and the Aladdin platform and risk management system it employs.

Adam-Curtis-Hypernormalisation

This sparked my interest into the use of such intelligence within the monetary system itself. The finance industry is clearly not distinct for its use of AI as compared to that of other spheres of life and work. I believe it is worthwhile exploring this in the following articles from The Economist;

The Monolith and the Markets

The rise of BlackRock

ASK conspiracy theorists who they think really runs the world, and they will probably point to global banks… Oil giants …..may also earn a mention. Or perhaps they would focus on the consumer-goods firms that hold billions in their thrall….

One firm unlikely to feature on their list is BlackRock, an investment manager whose name rings few bells outside financial circles. Yet it is the single biggest shareholder in all the companies listed above. It owns a stake in almost every listed company not just in America but globally. …..Its reach extends further: to corporate bonds, sovereign debt, commodities, hedge funds and beyond. It is easily the biggest investor in the world, with $4.1 trillion of directly controlled assets (almost as much as all private-equity and hedge funds put together) and another $11 trillion it oversees through its trading platform, Aladdin

In this context, let me quote Mark Wood, from The Memo;

Machines are only as moral as we tell them to be. And we are all flawed…

…..Machines are logical and lack the emotions that make us human. If we give them the power to think, why should they protect us rather than divide and conquer?

 

Please refer to my previous posts for an understanding on the workings and indications of the money supply. I enclose a link for another insightful article about this topic, especially pertinent at a time when expectations have been in flux regarding the hiking or cutting of record low interest rates;

http://www.telegraph.co.uk/business/2016/09/12/why-is-the-uks-money-supply-surging/

 

The above three part documentary (The Foods that Make Billions) is a well worth a view

For me it explores an underlying truth: the business of capitalism is to exploit and manipulate

Nowhere is this better shown than in the first of these episodes on water. How do you sell something that is readily available to people for free – you change (manipulate) people’s perception and convince them that they are better for paying to consume it.

As one commentator in the first part profoundly observes, (and to paraphrase); “The backdrop to this predicament should be clearly understood where one part of humanity can’t get access to any clean water to live, yet another part spends remarkable amounts moving/selling vast quantities of water from those that have to those that already have”

A further example of how insane behaviour can be shaped by the desire to accumulate capital and sell anything for the sake of profits is the following business which was recently seeking to raise investment. An extra-marital affairs website encouraging spouses to cheat, thereby increasing business potentially for divorce lawyers (very expensive), possibly increasing leisure/retail consumption (with the new partner, maybe even another wedding?), perhaps a spill over into the housing market too (new abode, sell old home?), whereas the real cost (and how would you like to measure this exactly) on any offspring from the marriage, on the wider family, the established correlation to crime statistics with those who grow up in broken homes and the consequences for society generally, is completely ignored.

The monetary benefits from such a business venture will readily show up in financial performance, shareholder returns, GDP indicators, but most of us will be left to argue about the drawbacks which no-one will be capturing and therefore any debate can be calmly brushed aside as unsubstantiated moral opinion.

The fact this company specifically targets married couples as a differentiator to other peer-to peer dating websites speaks volumes for the no limit approach to capitalism in the name of liberty and free markets.

I have previously discussed the argument about how the allocation of resources works more ‘efficiently’ under this approach than the alternatives, but it should be noted how severe misallocations of capital can easily occur which the wider community will pick up at the expense of the individual or select few participants.

Clearly, its not only bad tax law that significantly affects human behaviour. The amount of manipulation exacted in the name of profit should be appreciated.