Second Great Depression?

[sunskyfan]

Re: Second Great Depression?

Good posts ... I think the Mathematical way you are trying to answer ASH would be that once you examine a power spectrum all the phase information is destroyed and phase and time correlate here. You can characterize a system with a power spectrum but you can't control it with one. In other words there is structure in the market than can be measured and charectorized but can only be used to predict qualitative behavior.

[ASH]

Re: Second Great Depression?

*T*, pretty advanced stuff there. I wonder if all these models take into account all of the world CBs printing in unisson?

The CBs printing in unison is an example of the boundary conditions changing, which is one of the reasons economic cycles are not harmonic.

By the way -- the FFT to which T alludes is a method of calculating the Fourier transform of a data series. In my opinion, the Fourier transform (and its inverse) is one of the most useful concepts out there. And, being at heart a nerd, I am now going to subject you to much enthusing about a mathematical operation.

At one level, the Fourier transform is how you go looking for periodic patterns in a data set. Any arbitrary data set can be decomposed into a sum of harmonic waves, albeit with different weighting for each frequency -- the Fourier transform is how you do this. If the data isn't really periodic, then the different frequency components will have pretty equal weighting, and nothing will leap out at you. On the other hand, if the data conceals hidden cycles, then those frequency components will pop out in the Fourier transform. Of course, there are a number of mathematical caveats that limit how you can use the Fourier transform -- for instance, if the data set you are studying is of limited duration (e.g. economic data only goes back so far, and we obviously don't know what it will be in the future) or if it is sampled with finite resolution (e.g. do you have daily, weekly, monthly, etc. stock prices?) then you have to be somewhat careful to ignore the artifacts created by these limitations. Anyway, things that are periodic but not perfectly harmonic will show up as such in a Fourier transform, and T is alluding to the fact that approximate economic cycles and their relative strength (accuracy?) can be found by these means.

At another level, which I find more interesting, the Fourier transform is the basis for how a lot of subtle stuff works. For instance, the Heisenburg uncertainty principle from quantum mechanics is really just a consequence of the Fourier transform (and its inverse). When I take an x-ray diffraction pattern in lab, I am really just taking the Fourier transform of a physical piece of material -- that's an experimental way of performing the mathematical task. The Fourier transform also explains how you can get "white" light out of a supposedly monochromatic laser, if you pulse it fast enough, and lots of other neat stuff.

So, if you want to understand why things work, I highly recommend Mr. Fourier.... him and J. Willard Gibbs.

[ASH]

Re: Second Great Depression?

It can be quasi-periodic as I believe Kondratiev waves are supposed to be. This does not mean there is no predictive value. I think Kondratiev waves explain the credit cycle quite well and I wouldn't call it magic. Although there are many magicians who incant it as there are many magician who incant science.

ASH, as you're an engineer, I won't hold back. If you do an FFT of log daily price series, and plot the power spectrum on log-log plot, a purely lognormal returns time series would have a slope of -2. I have done this. Large cap indices like the S&P or FTSE conform pretty well except for the very low-frequency components, corresponding to long economic cycles. Smaller cap co.s, emerging mkt indices and commodities all have different signatures indicating long-range order.

This is not particularly new - Mandelbrot (who as a sideshow invented fractals) found the same thing for cotton prices for his PhD thesis.

Steve Keen's models all have quasi-periodic behavioural regimes (which apparently we are leaving into a debt-deflationary crash absent money printing).

Turbulent fluid flow displays cyclic behaviour but is not harmonic.

So it doesn't have to be harmonic to be quasi-periodic or cyclic. I would propose that the economy comes under such a heading. Ie. history rhymes but does not repeat.

Thanks for the commentary, T. I agree with you. That's why I was pretty careful in my post to talk specifically about the problem of timing. All it takes to get cycles is some kind of "mass" and a "restoring force", and the last part of my post was a nod to there being economic cycles -- just not harmonic economic cycles. The whole point of my post was that although the idea of economic cycles can help with the analysis of the big picture, the cycles can't be used for timing because they aren't harmonic.

[LargoWinch]

Re: Second Great Depression?

It can be quasi-periodic as I believe Kondratiev waves are supposed to be. This does not mean there is no predictive value. I think Kondratiev waves explain the credit cycle quite well and I wouldn't call it magic. Although there are many magicians who incant it as there are many magician who incant science.

ASH, as you're an engineer, I won't hold back. If you do an FFT of log daily price series, and plot the power spectrum on log-log plot, a purely lognormal returns time series would have a slope of -2. I have done this. Large cap indices like the S&P or FTSE conform pretty well except for the very low-frequency components, corresponding to long economic cycles. Smaller cap co.s, emerging mkt indices and commodities all have different signatures indicating long-range order.

This is not particularly new - Mandelbrot (who as a sideshow invented fractals) found the same thing for cotton prices for his PhD thesis.

Steve Keen's models all have quasi-periodic behavioural regimes (which apparently we are leaving into a debt-deflationary crash absent money printing).

Turbulent fluid flow displays cyclic behaviour but is not harmonic.

So it doesn't have to be harmonic to be quasi-periodic or cyclic. I would propose that the economy comes under such a heading. Ie. history rhymes but does not repeat.

*T*, pretty advanced stuff there. I wonder if all these models take into account all of the world CBs printing in unisson?

[LargoWinch]

Re: Second Great Depression?

AFAIK the problem with the Dragon Scale armor was that it didn't hold up well to long periods of time in the field (the stuff that holds the plates in position degrades, plates get loose, and when shot at bullets can still be deflected into you instead of stopped), that and the expense is why the Army is dropping it.

I don't know much about the current plates that are being used by the Army but if they suck they can be made better, this stuff seemed pretty good.

http://au.youtube.com/watch?v=abd9bp...eature=related

DragonSkin has the advantage of being able to wrap around body.

Trauma plates can be better if it directly in the chest or back, but what about the sides of your body? Shoulders? Arms? Also, we need to keep in mind that weight and mobility is quite important.

DragonSkin can be made to cover a much larger area of your body, is less bulky and heavy than top trauma plates, hence providing overall superior protection.

[*T*]

Re: Second Great Depression?

My insight is that in order to make a timing prediction based upon an oscillation, the oscillation has to be harmonic (meaning its frequency is fixed), and in order for an oscillating system to be harmonic, its boundary conditions need to be fixed. Since the boundary conditions which constrain the economy are obviously not fixed, you shouldn't expect oscillations with a fixed frequency, and you shouldn't be trying to time anything based upon economic wave theories. In my view, the people who read the most detail into economic wave theories are those most susceptible to numerology. Some of the big picture stuff about why there are economic cycles seems valid enough to me (basically a statement of what the boundary conditions and restoring forces are), but it is a huge mistake to read too much into them from the standpoint of timing.

It can be quasi-periodic as I believe Kondratiev waves are supposed to be. This does not mean there is no predictive value. I think Kondratiev waves explain the credit cycle quite well and I wouldn't call it magic. Although there are many magicians who incant it as there are many magician who incant science.

ASH, as you're an engineer, I won't hold back. If you do an FFT of log daily price series, and plot the power spectrum on log-log plot, a purely lognormal returns time series would have a slope of -2. I have done this. Large cap indices like the S&P or FTSE conform pretty well except for the very low-frequency components, corresponding to long economic cycles. Smaller cap co.s, emerging mkt indices and commodities all have different signatures indicating long-range order.

This is not particularly new - Mandelbrot (who as a sideshow invented fractals) found the same thing for cotton prices for his PhD thesis.

Steve Keen's models all have quasi-periodic behavioural regimes (which apparently we are leaving into a debt-deflationary crash absent money printing).

Turbulent fluid flow displays cyclic behaviour but is not harmonic.

So it doesn't have to be harmonic to be quasi-periodic or cyclic. I would propose that the economy comes under such a heading. Ie. history rhymes but does not repeat.

[mesyn191]

Re: Second Great Depression?

Yeah, it's classified now because it "doesn't work" according to the army.

Funny how you classify something that "doesn't work" AND allow the DV's who visit in theater to wear this stuff for "testing purposes".

It's like 4x as expensive as our SAPI plate shit (the 1 hit wonder and then you're done under), and from everything I've seen, worth it's weight in gold if you are being shot at.

AFAIK the problem with the Dragon Scale armor was that it didn't hold up well to long periods of time in the field (the stuff that holds the plates in position degrades, plates get loose, and when shot at bullets can still be deflected into you instead of stopped), that and the expense is why the Army is dropping it.

I don't know much about the current plates that are being used by the Army but if they suck they can be made better, this stuff seemed pretty good.

http://au.youtube.com/watch?v=abd9bp...eature=related

[Basil]

Re: Second Great Depression?

BTW. Based on rumors I hear in the ad business and banking in New York, I would say that January will be the worst drop in employment in the modern history.

This is some very interesting information. Could you elaborate?

[santafe2]

Re: Second Great Depression?

No magical thinking over here. No Elliot waves. No astrology. No second coming.

It's the nature of web call/response protocol to crush your more reasonable point of view when it does not completely repudiate the original post. You're simply wrapped in that first crazy linear measurement blanket of reality. By the way, I've enjoyed some of your posts. Hope you're resilient and willing to step out and sometimes get stepped on. I expect to see Jesus hitch hiking on my way to work before Elliot Wave Theory or the Kondratieff Cycle has any meaning. I've been wrong before so I'll let everyone know if I see him. By the way, it's pronounced Hay-sus around here.

[jtabeb]

Re: Second Great Depression?

I am not a military buff or anything, but these clips seem to agree with what you are saying jtabeb:

Part 1:


Part 2:



PS: Just to clarify; jtabeb, you are in the US military full time am I correct?

Unfortunately yes, (I wish I was part-time);)

[sunskyfan]

Re: Second Great Depression?

I think most analyst and "magic" types underestimate is the impact of the revolutionary digital influence on economy, person, and war.

We are experiencing a shock that has no Historical analog (no pun intended).

Basic protocols have been shattered.

Everyone is guessing.

[LargoWinch]

Re: Second Great Depression?

Yeah, it's classified now because it "doesn't work" according to the army.

Funny how you classify something that "doesn't work" AND allow the DV's who visit in theater to wear this stuff for "testing purposes".

It's like 4x as expensive as our SAPI plate shit (the 1 hit wonder and then you're done under), and from everything I've seen, worth it's weight in gold if you are being shot at.

I am not a military buff or anything, but these clips seem to agree with what you are saying jtabeb:

Part 1:


Part 2:



PS: Just to clarify; jtabeb, you are in the US military full time am I correct?

[jtabeb]

Re: Second Great Depression?

For those interested, while on the subject, the following will stop assault-riffle rounds better than anything else:



http://en.wikipedia.org/wiki/Dragon_Skin_body_armor

Yeah, it's classified now because it "doesn't work" according to the army.

Funny how you classify something that "doesn't work" AND allow the DV's who visit in theater to wear this stuff for "testing purposes".

It's like 4x as expensive as our SAPI plate shit (the 1 hit wonder and then you're done under), and from everything I've seen, worth it's weight in gold if you are being shot at.

[LargoWinch]

Re: Second Great Depression?

For those interested, while on the subject, the following will stop assault-riffle rounds better than anything else:



http://en.wikipedia.org/wiki/Dragon_Skin_body_armor

[c1ue]

Re: Second Great Depression?

JT,

Actually, only the first part.

The rest of the movie is about controlling the gas. ;)