How good is action if we can not forcast the future?

[mikesblack]

I have been quite interested in how forecasters can suggest future events based on today's knowledge. I have been researching this and have found some interesting answers. It seems as though forecasting can provide a range of possibilities with a degree of confidence based on modeling using past variables. The range of possibilities occur in a "cone of probability" drawn from present widening out into the future. As you know, this is done with hurricane forecasters. Models break down based on unknown or unforeseen events or factors. What seems what we are more likely to infer is what won't happen, rather than what will.( events outside of the "cone of probability".)

So it seems we and others agree on the premise that in this present day economic climate, we do not have any way to know how this will eventually work out, today, next week, one year or one decade from today.( Perhaps we can say that cone of probability has widened beyond that which any forecaster may know.) That being the case, we still have economists, investors and scholars debating this issue and hypothesizing the possible ways this can or may play out and the remedy.

The US Government is even taking steps to boldly intervene in the process to change the unknown outcome. This has been seen to calm the individuals ( human beings) who are part of this system. At this date, outside of the ones who are philosophically apposed about the idea of government involvement in markets, most are pleased with the decision. Even if it buys time, that is seen as a good thing.

If we are to assume that forecasting, especially in this environment is not possible, why then is it in anyone's best interest for the US government to intervene? The lawmakers listened in earnest as the central bank chairman stated that we were on the brink of a financial meltdown. That may be, but what would that exactly look like and for what duration?

The politicians can't or won't change this notion of not doing anything as a course of action because as we had on 9/11, people want immediate action to a challenge even if the event is too complex to do anything about. We would prefer seeing the government act, possibly with futility or worse, than to be seen as incompetent or indifferent(That has already been demonstrated).

I think of a past time when people who got sick went to doctors to find they put themselves in grave danger. (Known) remedy 100 or 200 years ago made conditions worse for the patient. People used to get bled to rid the body of infection and other arcane methods. Many more patients would have survived if they stayed home rather than get treatment.

That analogy may be simplistic and or inaccurate, but I wonder why would that be so considering what we ( or the treasury, lawmakers and central bank) know or should I say what we don't know?

[Jim Nickerson]

I have been quite interested in how forecasters can suggest future events based on today's knowledge. I have been researching this and have found some interesting answers. It seems as though forecasting can provide a range of possibilities with a degree of confidence based on modeling using past variables. The range of possibilities occur in a "cone of probability" drawn from present widening out into the future. As you know, this is done with hurricane forecasters. Models break down based on unknown or unforeseen events or factors. What seems what we are more likely to infer is what won't happen, rather than what will.( events outside of the "cone of probability".)

So it seems we and others agree on the premise that in this present day economic climate, we do not have any way to know how this will eventually work out, today, next week, one year or one decade from today.( Perhaps we can say that cone of probability has widened beyond that which any forecaster may know.) That being the case, we still have economists, investors and scholars debating this issue and hypothesizing the possible ways this can or may play out and the remedy.

The US Government is even taking steps to boldly intervene in the process to change the unknown outcome. This has been seen to calm the individuals ( human beings) who are part of this system. At this date, outside of the ones who are philosophically apposed about the idea of government involvement in markets, most are pleased with the decision. Even if it buys time, that is seen as a good thing.

If we are to assume that forecasting, especially in this environment is not possible, why then is it in anyone's best interest for the US government to intervene? The lawmakers listened in earnest as the central bank chairman stated that we were on the brink of a financial meltdown. That may be, but what would that exactly look like and for what duration?

The politicians can't or won't change this notion of not doing anything as a course of action because as we had on 9/11, people want immediate action to a challenge even if the event is too complex to do anything about. We would prefer seeing the government act, possibly with futility or worse, than to be seen as incompetent or indifferent(That has already been demonstrated).

I think of a past time when people who got sick went to doctors to find they put themselves in grave danger. (Known) remedy 100 or 200 years ago made conditions worse for the patient. People used to get bled to rid the body of infection and other arcane methods. Many more patients would have survived if they stayed home rather than get treatment.

That analogy may be simplistic and or inaccurate, but I wonder why would that be so considering what we ( or the treasury, lawmakers and central bank) know or should I say what we don't know?

Those are worthwhile thoughts. You doctor analogy is quite true.

I don't know any answers, nor where or when all this will perhaps end, if there is such a thing as "the end."

It is exasperating that suddenly after all the BS that has been put forth to "calm the markets" then suddenly our clueless lawmakers are confronted with what might be some degree of truth upon which they after years of doing jackshit are suddenly pressed to have to do something in the next week. Unfuckingbelievable!

[we_are_toast]

On one of the other threads someone posted a series of newspaper headlines from around 1929. If you didn't know they were from 1929 you might have thought they were from today.

The problem may not be that we can't forecast the future, the problem may be the future is too clear and it looks an awful lot like the past.

[mikesblack]

On one of the other threads someone posted a series of newspaper headlines from around 1929. If you didn't know they were from 1929 you might have thought they were from today.

The problem may not be that we can't forecast the future, the problem may be the future is too clear and it looks an awful lot like the past.

I believe the notion that we can not forecast complex iterations of events in the future by looking backwards. The factors that produced the depression in September of 29, while they may seem similar, if we look closely, are not representative of today's crises and today's world. One can not infer any correlative and or causal association based on one sample (great depression).

I believe many of us are susceptible to focusing or "anchoring" to past significant events that may represent today's perils but do so in error.

That said, perhaps there comes a point in complex systems when the scale of individual factors becomes exponentially significant so to determine the trajectory of an event but not necessarily the scale of the event. (Even though a cat 4 0r 5 hurricane is known to hit land, no one can foretell the cost of the devastation. No hurricane is ever alike, even if it hits the same place, such as Ike.)

[Verrocchio]

There's truth in the expression that "History does not repeat, but it rhymes." This expression is consistent with the fractal patterns that emerge in chaotic systems. Robert Prechter has done extensive work on this.

In practical terms, however, the cone of probability that weather forecasters use to describe the likely path of a hurricane is a very good analogy for individual investment decisions. The cone for the current situation is simply much broader than the cones that we have been using until this date. (Core commentators on this board like to describe their decisions in terms of a theory upon which they are willing to act.)

I agree, Jim, that our Congressional leaders have once more given convincing evidence that they have no clue as to what has been going on under their noses. It's amazing (and disgusting) that they present themselves as now primed (on the basis of a brief meeting with the Fed, SEC, and Treasury) to take decisive action when no one knows where the hell have they've been for the past decade. The views that you expressed above and at other times, on the fate that should await these spineless cretins, although somewhat dark and redolent of violence, seem ever more fitting as their massive culpability is unmistakably revealed.

[Jim Nickerson]

There's truth in the expression that "History does not repeat, but it rhymes." This expression is consistent with the fractal patterns that emerge in chaotic systems. Robert Prechter has done extensive work on this.

In practical terms, however, the cone of probability that weather forecasters use to describe the likely path of a hurricane is a very good analogy for individual investment decisions. The cone for the current situation is simply much broader than the cones that we have been using until this date. (Core commentators on this board like to describe their decisions in terms of a theory upon which they are willing to act.)

I agree, Jim, that our Congressional leaders have once more given convincing evidence that they have no clue as to what has been going on under their noses. It's amazing (and disgusting) that they present themselves as now primed (on the basis of a brief meeting with the Fed, SEC, and Treasury) to take decisive action when no one knows where the hell have they've been for the past decade. The views that you expressed above and at other times, on the fate that should await these spineless cretins, although somewhat dark and redolent of violence, seem ever more fitting as their massive culpability is unmistakably revealed.

Life is all any organism really has that is unique and valuable, and I mean that down to despicable flies; however, some things are so noxious that I personally can tolerate killing them--flies, and gnats at times. Actually, I do think there are people that need killing, and though I wouldn't pull the trigger myself if the gun(s) were aimed at the politicians that now "govern" this country, if it happened that something wiped them all out, after the shock of the event I would conclude it was a good thing--seriously.

If you think about this shit, which I guess most people here do to one degree or another, the current system in not working; anyone who thinks it is and that the next election will bring in the fix is incredibly naive in my opinion.

What we have is an ignorant electorate (myself included in the ignorant part, but not the voting part) choosing people who are slightly less ignorant in finance, but who are much smarter when it comes to protecting their own asses--these would be the elected officials at most all levels.

Short of armed insurrection (way unlikely right now), or an overthrow of the government by some military junta with the installation of a benevolent dictator (unfortunately though I see this as the quickest reasonable answer, I don't think it will happen, Buffet for the moment would be my choice of "benevolent dictator"), the best thing that could happen would be for 70% at least of the population to band together and make it known to all those running for office that they shall only serve one term until and if some majority of serious individuals are elected such that this country outlaws and enforces laws against graft, corruption, and self-serving influence of the rich corporations and individuals that affect the course of this country negatively with regard to it truly becoming the premier country in the world.

That is not going to happen.

The next best is to vote against all incumbents and insist that they as leaders make themselves subject to the same rules and regulations that apply to all us sheeple. One example of "sameness" would be rather than going to Bethesda if a senator, or the next Cheney with a bad ticker, has a heart attack, he goes to the charity hospital serving most of the uninsured in DC and gets whatever care it offers. Same for Kennedy, let him go to whoever happens to be on call for brain tumors at the local charity hospital.

Dream on about changes in how the US government operates during anyone's, who is here, lifetime.

[mikesblack]

There's truth in the expression that "History does not repeat, but it rhymes." This expression is consistent with the fractal patterns that emerge in chaotic systems. Robert Prechter has done extensive work on this.

In practical terms, however, the cone of probability that weather forecasters use to describe the likely path of a hurricane is a very good analogy for individual investment decisions. The cone for the current situation is simply much broader than the cones that we have been using until this date. (Core commentators on this board like to describe their decisions in terms of a theory upon which they are willing to act.)

I agree, Jim, that our Congressional leaders have once more given convincing evidence that they have no clue as to what has been going on under their noses. It's amazing (and disgusting) that they present themselves as now primed (on the basis of a brief meeting with the Fed, SEC, and Treasury) to take decisive action when no one knows where the hell have they've been for the past decade. The views that you expressed above and at other times, on the fate that should await these spineless cretins, although somewhat dark and redolent of violence, seem ever more fitting as their massive culpability is unmistakably revealed.

We need to be able to identify the significant patterns without committing the clustering illusion. Hindsight confirms any pattern that existed by chance if we are looking for it. Perhaps our world economy is at a bifurcation point and disaster is illuminant. Sure seems that way, but how can we know we can trust our own internal bias or what me may deem as "common sense" so that we can be reasonably sure we are not committing logical and or psychological fallacies?

[Verrocchio]

if it happened that something wiped them all out, after the shock of the event I would conclude it was a good thing--seriously.

Wouldn't matter, though, would it, Jim? Another set would quickly come forward, and they would perform in much the same way, give or take.

What we have is an ignorant electorate (myself included in the ignorant part, but not the voting part) choosing people who are slightly less ignorant in finance, but who are much smarter when it comes to protecting their own asses--these would be the elected officials at most all levels.

One need look no further than the current election to find examples.

Short of armed insurrection (way unlikely right now)

Anyone who has kept abreast of the amped-up surveillance, tactics, and firepower of the local constabularies that are the result of Homeland Security and the newfound unconventional fighting capabilities that were developed for use against the Iraqis would quickly agree with you on this point.

The next best is to vote against all incumbents and insist that they as leaders make themselves subject to the same rules and regulations that apply to all us sheeple. One example of "sameness" would be rather than going to Bethesda if a senator, or the next Cheney with a bad ticker, has a heart attack, he goes to the charity hospital serving most of the uninsured in DC and gets whatever care it offers. Same for Kennedy, let him go to whoever happens to be on call for brain tumors at the local charity hospital.

People seem to accept that those they elect deserve better than they have themselves. This rather seems to turn the concept of public servant on its head.

[Jim Nickerson]

Wouldn't matter, though, would it, Jim? Another set would quickly come forward, and they would perform in much the same way, give or take.


We're truly wasting our times writing about things that in all likelihood won't happen, but were it possible to wipe out the entire lot and start will a new group in which they were all equal and no one had to suck up to any other, then it might be different, but of course who knows?