Jan

13

To say that viruses are masters of deception is an understatement. They can't reproduce themselves so they have to trick the cell into reproducing them. And in doing this they have to deceive the cell's control mechanism to prevent getting killed. Since they have evolved over many billions of generations, they have become masters at deception. I was drawn to this subject as one of my grandchildren was watching a clip of Max and Ruby  on youtube. I stayed with him for the first few minutes, but all the sudden I heard a stream of curse words coming out. Apparently this is very common on youtube. The beauty of the deception was how they waited a few minutes to start the imprecations, knowing that the parents would be off guard. It is loathsome to think that some people would devote their time to hurting kids like this and putting them in the way of disgusting ideas and thoughts. It is also loathsome to think that humans can learn from viruses, and apply all their techniques to hurt honest people like players in the market. A good review of deception in biology is contained in University of Washington biologist Carl Bergstrom's recent paper "Dealing With Deception in Biology". I thought I'd test a few of these basic techniques to see how they work out in the evil market firmament.

Here's one. The virus S&P rests unchanged around noon but as of 1 pm is down a reasonable amount. It's happened 41 times and the market drops on average another two point by the end of the day with a standard deviation of nine points. The virus stays latent until midday within a range, with the midday price no more than 1/2% away from both the maximum and minimum of the day up to that time. Then it tries to reproduce at 1 pm, by going up more than 1/2%. The natural killer cells of the market come in and move it back 1/5 of a % or so by the close. Similar to my killing the Max and Ruby show after it was latent for five minutes, but then I heard it, and turned it off with a slam, and no more watching that tubular video for the youngster.


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4 Comments so far

  1. glenn on January 15, 2009 2:07 am

    This whole downturn seems to prevail an evilness soul or ghoulishness to oxy-rate. one wonders who/why/what’s next to bring all this to its limitations. A man has got to know his limitations, sadly its coming by hook and crook. The sane will be shamed but will prevail. just hang’n in myself but geez what a discombobulation of enormous proportions. P.S. looks good on the short side usd/jpy only thing other than gold glittering ever other day.. regards g

  2. douglas roberts dimick on January 15, 2009 12:12 pm

    V, albeit the natural/artificial (or human created) distinction that one may assert here, this article appeas to offer a doctrinal validation of your market theory on patterning…

    “…One of the foundations of control system design is the use of feedback or “closed-loop” control… [to] allow systems to function effectively across a range of conditions, stabilize otherwise unstable dynamical processes, and facilitate closer tracking of the desired trajectory… closed loop control is a highly efficient way to regulate and coordinate behavior. Thus it is little surprise that feedback control is widely used in biological systems from adjusting the circadian clock to the control of metabolism…”

    Comparatively, price action and metabolism are synonymous from a QR (quantitative relativity) standpoint, and signaling (see subsequent peacock-eBay analysis) in cellular commitment evinces a rules-based evolution that effects discrete quantification of information flows.

    Thus, we are presented with the three aspects of “the basic problem” — or honest communication, if you will — to correlate cross-validation (or modeling of repeating phenomenon as quantifiable patterns) of distribution(s), regardless of outcome-orientation dissemination and redundancies – listed here as deception albeit subversion.

    Gain/loss to exchange is price action, whereby strategic conflict becomes long-short assimilation(s) of market positions. Market positioning correlates information asymmetry based on rules-based defined states for input-output commitment(s), which form conditions precedent for those close-loop functions of the exchange process itself.

    This is so?

  3. Perry E. Metzger on January 16, 2009 2:20 pm

    What I don’t understand about the proposed analogy is this: Biological systems like viruses gain an evolutionary advantage from their adaptation to their environment and thus will tend to adapt. A bacteriophage that is better at convincing bacteria to make more bacteriophages will be found a lot, one that is poor at the job will go extinct.

    In the case of the S&P, what is the system in question that is “reproducing” better if it “adapts” better? The S&P index is a formula and a set of 500 stocks, it isn’t something that can leave more or fewer offspring. Perhaps it is the investors and other players in the market that are evolving, but I don’t see how something that neither profits nor is harmed nor reproduces can evolve a behavior.

  4. douglas roberts dimick on January 17, 2009 8:05 am

    P, my take was similar to distinguishing types of patents between process and article/thing (e.g., machine); patents could also be an improvement of either process or thing/article. Here I understood the reference to be the process not the SP itself. The cited article talks about biological processing via closed-loop control. I may be way off here — sounds as if V was just having fun anyway.

    Regardless, I learned a new aspect as to closed-loop control relative to market exchanges. I find this analogy on point, which is what I thought was his underlying point. Just as he turned off the chocolate bunny show, so to occurs with the S&P, both the thing itself (end of session) and the exchange process, as he recounts one such afternoon example.

    dr

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