FutureJacked

Mad As Hell...

2012-08-03T07:59:00.001-06:00

Crushed cruisers at the Orleans County Sheriff's Department

Those of us using Socionomics as a model to see what the future holds perked up a bit at this news story:

Vt. Man Accused of Crushing 7 Cop Cars With Tractor Due in Court

A Vermont man, who authorities say was angry over an arrest and used his tractor to drive over seven police vehicles, is expected in court.

State Police say 34-year-old Roger Pion (PEE'-on) was taken into custody in Newport on Thursday, shortly after he allegedly crushed the Orleans County sheriff's vehicles. Estimated damage was at least $250,000.

He was apparently mad over his recent arrest on resisting arrest and marijuana possession charges...

Anecdote or data point? I can't say for certain, but this is not just anger, but direct violence against the law enforcement organs of State control.

Until the markets "confirm" these types of outbursts with a significant drop, I won't buy in that the Bear is back, but if this is any indication of what is in store for the coming downtrend, well, it could get real ugly out there friends.

Have a good weekend.

A Superstitious Fund - the Perfect Fund for our World

2012-07-31T14:01:00.000-06:00

A Superstitious Fund

Here is a fund for our times - A Superstitious Fund!

The Superstitious Fund Project is a live one year experiment where an uncanny algorithm or SUPERSTITIOUS AUTOMATED ROBOT will trade live on the stock market. The financial instruments it will be using will be spreadbetting on the FTSE 100.

The superstitious trading algorithm will trade purely on the belief of NUMEROLOGY and in accordance to the MOON. It will for example have the fear of the number 13, as well as generating its own beliefs and new logic for trading

Part of me wants to gently mock the premise behind the fund. Then I recall my own trading record and will instead keep silent.

My only comment is on the name. Fifteen years ago I bet they would have dressed up their algo by naming it some mish-mash of the words "quantum," "long term," "strategic," and "Buffett" - using some sort of hedge fund name generator similar to the ones they use to put names on suburban subdivisions. Instead, in keeping with a moodier time that should be a little more publicly tolerant of magical thinking, and, frankly, with some refreshing honesty, they just flat-out named it A Superstitious Fund.

Kudos to them for making it public and for their plan to post results. Hell, that's more scientific than a lot of "science" that goes on today in a several disciplines that should know better.

Always Remember the Bureaucracy Doesn't Care

2012-06-25T09:10:00.001-06:00

Sorry for the long silence. This is mostly due to being incredibly busy at the day job. It is funny, but not ha-ha funny, that I've never been busier working projects to a successful conclusion and planning new production expansion, while in the distance I see what I believe is an incoming asteroid of negative mood, hissing towards earth, ready to blast a hole in the best layed plans I might have. Until then, though, I'll keep cashing that paycheck.

Then I ran across this story out of Tulsa and felt I had to comment on it:

Amazing. Here is a woman actually trying to do something for herself. She has tried to supplement her food supply by her own hard work. She has tried to improve and manage her health using plants she grows herself. She even educated herself on the local ordinances to make sure she was within code.

None of it mattered.

I have often suggested that you should acquire some high-quality gardening tools and plant a patch yourself. It is a great way to be productive and to add the occasional healthy fruit or vegetable to your table. In these sorts of rally periods, where those of us who are convinced we are headed off a cliff, these kinds of pursuits can help keep us grounded and hopefully make our households more resilient for an era when resiliency will trump the Cult of Efficiency. Who knows, you may get bit by the bug and go on to grow much of your household's food to help conserve cash, or maybe you'll go on to help coordinate a community garden when times get tough, building up ties among your neighbors, ties which could prove far more useful in a post-Crash world than a survival bunker and cases of 9mm ammo.

Always remember, the Bureaucracy, especially that small but very vicious segment of the the Code Enforcers and Home Owners Associations dotting this fair land, hates you. Period. If you are trying to do something creative, to become even a little more self-sufficient, to step outside the norm, they will come after you with hammer and tongs. If you wind up unlucky and in their cross-hairs, they will not hesitate to drive you to your death and, at the moment, there is little recourse. They will ignore their own codes, they will ignore the law, and they won't be sanctioned by local courts. There ain't no tyranny like local tyranny.

The current rules structure, zoning laws, and the people enforcing them are made for an age that died with Lehman Brothers. They want everyone to be shoe-horned into a suburban plot with flowers and a nicely mowed lawn. They want strip malls filled with service "industry" businesses, they want to shake down local contractors on the side, they want to extort money from buildings underway, turn property over to their crony capitalist friends so they can come along for the ride, and in general, they want it all to be like it was in 1995. They will roust the formerly middle class as they drop into poverty. they will enforce and stretch the interpretation of every ordinance they can to every inch they can get, to try and cram the world back in a box that has been blasted to pieces. They will not like anyone who tries to make things more resilient, especially when it happens from private effort.

Be aware of this. This too shall pass, but the Bureacracy will continue running their obsolete operating system for as long they can, and they won't care what or who they destroy along the way. Because it will all be turning around soon and it will be just like the 1990's...

2012-05-18T12:28:00.000-06:00

Fear and Loathing, RileyStark

I ran across "The Gonzo Futurist Manifesto" via one of those odd stumbles that happen on the web while digging for something completely different. Normally I would shy away from anything with the "gonzo" label on it. One guy did gonzo, and he's dead. But I'm glad I made an exception this time. Justin Pickard looks like an interesting guy.

It's thought-provoking and worth your time as we continue to tip-toe along the edge of the plunge into What Comes Next...

From The Gonzo Futurist:

...In 2012, then, things reach a head. The world spins faster, accruing whole orders of complexity as the American Empire crumbles into a decidedly more interesting new world order. After twenty, fifty, or five-hundred years of globalisation (depending), we stumble across the threshold of (dis)integration, watch the Mayans emerge from their hole in the sky, and find out what we’ve won: transcendence or oblivion.

Well, that’s the scheduled broadcast. The looming reality is a lot less binary. In postnormal times, the world has both centrifugal and centripetal tendencies: transcendence and collapse; integration and fragmentation. History didn’t end with Fukuyama. Collapse contains the fractal seeds of transcendence. Things come together as they fall apart. Ours is not the flat world of Thomas Friedman, but the ‘unevenly-distributed’ future of William Gibson. It has contours...

Change is Coming

2012-05-07T13:48:00.000-06:00

Breakdown/Rebuild by Jenna Workman, hosted at Society6

Another long pause between posts. These long levitation periods often leave me with little to say. I don't trade them well and I am emotionally biased to believe the market should "see" how ugly the underlying fundamentals are and get back into the Bear Market business (knowing that socionomics has a lot to say about the true nature of cause and effect). Add that combination of waiting for the next shoe to drop to a busy schedule and all of a sudden its been several weeks since I've tried to thrash out a post. Oh well, that all changed when I finally tackled a stack of non-critical mail the other day and pulled out the May copy of Popular Science.

Drones Again

I read through the May edition and came across an article that jolted me enough to get a post up. It hits on a topic I think will help drive the dysfunction I expect to see all around us when the Bear returns - the massive difference between reality and what people have been programmed to believe are successful patterns of behavior. It came up under the topic of drones and the changing face of war, but I think it applies much more broadly.

The Human Element
Why Drones Won't Be Taking Over Our Wars Anytime Soon
By C.J. Chivers

...Those who train for this kind of warfare know that no drone yet exists that could handle such a scenario. The drone would have to be alert to all of these factors, relay them to a remote pilot on the other side of the world, and make corrections in the time required to react. Missions like these will remain the work of the same classes of aircraft—and the pilots and weapon-systems officers who fly with them—who have been flying these missions for decades. With each design cycle, drones will no doubt be further integrated into the busy mix of a modern military air campaign and maybe, eventually, into missions over hostile airspace with anti-aircraft guns and enemy fighters. But humans will be up there with them, flying old-school pilot-on-the-ejection-seat flights and calling the shots. As that day perhaps draws near, the limits on where drones can fly will remain. The MiG that punched that Hermes 450 out of the sky laid out a fact unlikely to change soon. When the skies turned violent, all the Hermes could do, in the end, was watch—even its own fiery end...

We've thought a little about drone technology this year (see The Tilting of the Megapolitical Balance? from February), so I won't rehash it here, except to say again, it is a hobby you should take up.

I am not cheerleading for an end to manned combat aircraft. Hell, I am of the Top Gun generation and was tracking towards landing a slot at the Air Force Academy before my crappy eyes DQ'd me from what I had hoped to do.

I am not arguing against the points Mr. Chivers makes in this article. In fact, I regard him as precisely correct. Precisely, as in, where the technology stands today, and assuming most major wars will involve big nation-state armed forces standing up against one another, slugging it out.

I do think this is an example of the type of thinking you absolutely have to be on guard for once we begin to replumb the depths of negative mood. Being precisely correct will be a debilitating problem for a huge percentage of people once we hit that inflection point.

Mr. Chivers comes at this from a very standard and accepted view of large-scale conflict. There are clear-cut "good guys" and "bad guys" in this framework. Your nation-state (the good guys) has objectives and wishes to impose its will upon another nation-state or "terrorist group" (a.k.a. non-state actors) to achieve a political end. All very Clausewitzian and all going down the drain.

What if drone technology is not going to be designed for the things Mr. Chivers worries about, such as close air support? What if the technology is going to be focused on extremely local violence or surveillance? What if the future of war and violence is going back to armed gangs and mafias, groups flitting about the feet of the giant nation-states, focused on extracting information and extortion money from individuals or communities?

And what if the governments that run these massively expensive fleets of aircraft he describes in his article wake up one morning to a disintegrated bond market and crashing tax revenues? What happens to the money for training, fuel, and maintenance of these Top Guns? How many Generals and Admirals are contemplating this scenario?

If I can launch a drone swarm for under $10,000, have that swarm pursue and then assault an individual through sheer kinetic attacks (dropping from the sky at high speeds with nothing more than a jumped up knife, for instance), what good does a Fourth Generation fighter jet do for the victim? Or what about the potential for constant surveillance by both governmental and non-governmental agencies? What is a hot shot pilot going to do for me when the skies can be filled with cheap drones that monitor all communications and steal my credit card information?

I think Mr. Chivers is precisly correct, much in the way French military theorists were precisely correct when they planned and built the Maginot Line. They built their systems and validated their actions by the assumptions they chose - assumptions based on a world that no longer existed (but they had not yet received the memo).

Other "Battlefields"

How many other aspects of modern life fit this for most people? How many people have seriously considered events such as the following:

The seizure of all assets held in IRA accounts and the replacement of those investment portfolios with special bonds "sold" by the government for that purpose. This would be backed up by Congress upping the penalty for withdrawal to 100%.
The pullback of U.S. military forces from the vast majority of overseas bases.
Means testing for Social Security and Medicare
Local governmental bureaucracies requiring citizens to "donate" labor or pay a set tax to help with the upkeep of local facilities
Middle Income Individuals being subject to small-scale extortion or kidnapping threats
The use of private military contractors to secure public areas and prevent locals or media from investigating events in those areas such as hazardous materials releases and no ability by local law enforcement to oppose this
In the grips of a credit crisis, your debit card and credit cards no longer function, loans which you have regularly serviced are called in with no warning, and you are prevented from withdrawing more than $300 from your account in cash each month.

All of the events described above have happened in both the U.S. and other countries. Not all have happened in the U.S. yet, but...

This is not meant to be an exercise in fear-mongering. I just want to drive the point home that a lot of very smart people are very convinced that their "map" of the world "is" the True and Right map that will lead to success. Whether that map includes a very expensive college degree and loads of student debt upon graduation, or whether that map includes trust in the U.S. Congress to protect individual interests above Corporate interests, you can expect those people to be very disappointed when the worm turns. What will these people do when confronted with "impossible" situations? What kinds of politics will arise from that ferment?

What kinds of opportunities for success will you be able to see that others, blinded by fear and anger at the crashing down of their "world," will miss?

Embrace what is to come. Even if you've planned as well as you can, bad things can still reach out and hit you. Be mindful of it, but don't lose it if your plan goes awry. Who knows what kinds of crazy policies will be imposed from above, or what kinds of dysfunction will bubble up from below? Just know that life will still go on, that much of life will still be enjoyable (though probably very different), and that you can still act while others are frozen.

More Negative Mood Anecdotes

2012-04-16T14:34:00.000-06:00

Argentina continues to be my favorite touchstone for what is to come for most Western governments and societies. After their debt collapse and currency devaluation a decade ago, followed by the seizure of private retirement funds, I think they are blazing a trail we'll see trampled down by many governments between now and 2020.

Here is some saber-rattling about nationalization of a key energy company using the language of scarcity and depletion (note that Ms. Kirchner's government says YPF has not invested "enough" into the sector to keep supplies sufficient to meet public demand. We'll see how government control, if it comes to that, will help with that. Between depletion, high costs for advanced extraction techniques and a high dose of bureaucracy, one can imagine the outcome. Add in some threats to retake the Malvinas and we would have a full-blown negative mood marker in play here.

Open Thread for Anyone to Comment from the Socionomics Summit

2012-04-13T07:35:00.001-06:00

Alas, I will again miss this year's Socionomics Summit. If anyone attending gets the time, feel free to drop a comment here to let us know what we are missing.

Thanks in advance.

This is Your Brain on Optimism

2012-04-12T10:52:00.000-06:00

Optimism, by Trevor Lee via Society6

Here is some research that could prove very interesting to those of us interested in Socionomics:

Are humans too optimistic for their own good?

by Robert T. Gonzalez, io9

We humans are a hopeful bunch — so hopeful, in fact, that our views of the future are often irrationally positive. But at what point does unflagging optimism become detrimental to our progress and success? Is there any chance that our starry-eyed tendencies could actually work in our favor, or do they simply leave us unprepared for future misfortunes?

It would be very interesting to conduct these fMRI studies over a period of time and see if this optimistic bias shifts over time and then compare that data to the resulting Elliott Wave patterns found in market movements.

If nothing else, this article reinforces my belief we are still in a net-negative mood era (with a long way to go before we exit it), otherwise I don't think we'd be discussing how optimism might be a bad thing in all cases. Amazing the doors fMRI can open for us.

The New Burning Man Trend

2012-04-04T10:55:00.001-06:00

When There's Nothing Left to Burn..., by Camden Noir

Another Greek Tragedy getting traction in the media:

All hope 'annihilated,' retiree kills himself outside Greek parliament
by msnbc.com staff and news services

A retired Greek pharmacist shot himself dead outside Greece's parliament Wednesday, saying he refused to scrounge for food in the garbage, touching a nerve among ordinary Greeks feeling the brunt of the country's economic crisis.

The public suicide by the 77-year-old in the center of Athens quickly triggered an outpouring of sympathy in a country where one in five is jobless and a sense of national humiliation has accompanied successive rounds of salary and pension cuts.

Just hours after the death, an impromptu shrine with candles, flowers and hand-written notes protesting the crisis sprung up in the central Syntagma square where the suicide occurred. Dozens of bystanders gathered to pay their respects...

Self-immolation has played an increasingly imporant part in the "resistance" memes that are building up as more and more people lose faith in systems that look corrupt beyond repair (see Tunisia as a specific case and this article discussing the building phenomenon in the Arab World).

Most of these horrible events are swept under the rug and receive little to no attention in the various media. They are potentially powerful images, though. When this rally finally collapses, self-immolation may become part and parcel of the wave of anger that will come to dominate politics and society. Watch also for the tipping point, when people who feel they have nothing left to lose turn from self-destruction, to the destruction of those they blame for the destruction of their dreams...

The Lay of the Land

2012-03-23T15:19:00.000-06:00

Woodland Path, William Arnold

What to do?

I continue to expect the path our society, our political system, and our financial markets are following, to reach an inflection point the likes of which have not been seen in over two centuries in the immediate future.

Until we see the crises unfold that this shift in the social dynamic will cause, we continue to be left dangling in the wind, preparing as best we can. I thought it might be useful to at least go over some of the more obvious results once the crises pick up in speed and intensity.

Income

When federal spending shrinks, the ripple effects will be huge. Transfer payments alone are measured in the billions of dollars each month. I fully expect you will see means testing imposed on Social Security and Medicare payouts (likely as an "emergency" Executive Order at first that gets hashed out in the courts or Congress later, assuming there is enough coherenc left in the government sector to make that relevant). You can also expect the large and expensive systems related to the Obamacare system to not be funded and that as payouts drop, to see tremendous numbers of "billing errors" from insurance companies as the scramble to loot what little is left in the system becomes frantic.

For those with money in the bank, if you are reading this, then you know as well as I do that this is a crap shoot. What banks mnight survive, what "emergency" legislation might get passed to "help" the banking system, etc. is completely unknown. As the bureaucracy is not very creative, we can expect cold leftovers from previous crises, which might include a Bank Holiday, capital controls, etc. all in the face of strong advice to not to. What this would do to an economy heavily reliant on automated billpay, electronic transfers, reliance on outsourcing for many manufactured goods, and the entire mechanism that keeps things humming along is unknown.

The short term agony of a cutoff or reduction of government transfer payments as well as probably hiccups in the banking system would then be replaced with the long term agony of an economy which has to now adjust to a radically different set of circumstances. The credit spigot will have been choked off, the debt burdens would be enormous, and the income streams available will be unable to service the debt, much less anything else. Bankruptcies will skyrocket.

What remains to be seen is how the millions of students who were programmed to go to college and took out enormous loans to do so handle the fact that student loans cannot be discharged easily in bankruptcy. I would imagine that courts would eventually take into account the economic environment and grant the "undue hardship" exception on a wide basis - but in the early days of the crisis I would expect that many courts would continue to have the mindset of the Bubble Years and lecture said debtors on their lack of gumption, or their unwillingness to work hard or start low on the totem pole as a fry cook or something like that. I fully expect some utterance from a constipated justice late to his tee time to feed into the political revolt I expect will be ongoing at the time via viral videos. I particularly look to the student aspect as this demographic is one most easily co-opted into the Occupy Movement, which I think will itself, or a splinter group, form the nucleus of a valid Third Party.

The rest of it is as unknown to me as it is to you. Will your job survive? Will your renters be able to pay their rent? Will those dividend stocks continue to pay?

Incomes will plummet. Debt will be discharged - most often painfully. The system to process all this debt and property transfer activities will gum up. Chaos will reign in many regions as local bureaucrats try to sort things out.

Even having a chunk of proprety paid off may not help as much as you'd think as we can expect much more in the way of...

Taxes and Government Intervention

Even if voters knock down attempts to raise taxes in an environment of falling property values, high unemployment, and collapsing incomes, expect a rise in unk fees and outright theft via government action. Charles Hugh Smith gives us a taste of what is to come in a recent article entitled Welcome to the Predatory State of California - Even if You Don't Live There.

Remember how easy the feds and states made it to get your tax refund by asking for your bank account information? Well, that is how they can, and in some cases I fully expect will, reverse the flow and initiate seizures of your property based on the flimsiest of rationales. Have fun with the appeals process.

I won't go into detail on what I expect the paranoid Security State apparatus to try and get away with when things are in full free-fall. Suffice it to say that, as the Elliott Wave Theorist put it 9 years ago, "[t]he U.S. will require internal travel papers" - and that will only be the beginning of it. Where the paranoid Security State will run into problems is who will pay for it. Yes, governments always seem to find cash to fund oppressoin when the chips are down, but the U.S. is a heavily armed, continent-sprawling country with a mythos rooted in liberty and resistance. This will probably break down into a theme where overt authoritarian actions are confined to large population centers with the more subtle cultural pressures used to keep the far-flung Flyover States in line. Should be interesting to see how it works out.

Energy

I've long considered the energy component of the coming crisis to be far more important and far-reaching than one might think at first. The current method of generating and distributing power was deployed during the greatest era of bullishness and positive mood the U.S. has ever experienced. This infrastructure is complex, easily disrupted by bad actors, and reliant on supply chains that have never had to endure a long-term bear market.

Prices for electricity very well may stay low for an extended period of time as demand collapses. It is likely that power rationing may be put into place at times as a result of violence or breakdown. Something is going to give and I expect that the way we produce and use electricity will be fundamentally different by the time we traverse this era of negative mood.

This goes for liquid fuels as well. Oil prices may very well collapse again as demand drops during a downturn, which will be good for those who still have a job to fund their driving habit. It very well may be the case here, as in electricity, that internal politics or violence could cause fuel disruptions long before any geological limits are reached.

As for the promise of new nuclear power plants, I spent some months in early 2011 trying to work with the data to find how the use of nuclear power matched up with the patterns in the stock market. This has proved, so far, to have been a bit of a dead end. The very long lead times and large cash outlays involved seem to have clouded the response to changing moods, at least in the short term. I continue to chew on the issue, but don't see a clear correlation yet. What I can pass along is the "flavor" of what I expect. Nuclear power seems to have a split personality. It came of age in the optimistic 50's and 60's, then deployed in the 1970's during an era of net negative mood. The bomb program has always been tied to it, and the fear associated with the few major nuclear accidents have been of extreme magnitudes in relation to the actual damage caused. The plants in operation today are products of a positive mood era - big plants providing massive amounts of electricity feeding into a complex grid. The future may very well be bright for smaller nuclear plamts (the so-called Small Modular Reactors, an area of great promise) that can be produced in factories, deployed on-site, not require refueling, can be small enough to power local areas but not reliant on a national grid to safely distribute the load, but on the whole, I expect the coming downturn to kill off the building of new nuclear plants as their massive initial cost in a time of declining energy demand will not be justifiable.

Electricity may not cost a lot, but it may be intermittent for those relying on the grid. That will, like most things, depend on how your fellow citizens handle themselves and the outlets they choose to use to express their anger.

Supply Chains

As the U.S. faces a decline in its ability to project empire, we can expect severe dislocations as regional players assert themselves. I agree with the February Socionomist that now is probably not the time to expect World War III, but that doesn't mean that "police actions" in the Middle East or Asia won't be devastating to world trade. Add into the mix the desire to erect trade barriers and fight trade and currency wars and you can expect a lot of changes in how companies get things built and how supply chains for everybody from Wal-Mart to vitamin-makers work when the U.S. and China duke it out via trade sanctions, or Europe goes on the offensive via the WTO (for as long as that organization will last, at least).

Summary

In short, incomes down, taxes and regs up (at least initially), energy unreliable but probably cheap in the right circumstances, and supply chains that have to be refashioned.

Do with that what you will.

Have a great weekend.

The Changing Wind of Socionomics and Justifying Controls on Emigration

2012-03-19T13:52:00.000-06:00

One theme that the team over at the Socionomics Institute has followed on a regular basis is the trend towards increasing authoritarianism in an era of negative mood bias. The expression of that net negative mood may change depending on the time and place. Just as you need "seed"particles to generate a good rain - or massive thunderstorm - so do you need "seed" ideas or memes to generate the horrible events that can unfold in times of intensely negative mood.

These ideas are out in the wilds of academia all the time. Which ones get seized and energized by the mass mood looking for an outlet can, I theorize, be shaped to a degree by advertising or propaganda, but the beast itself must have ideas to express through. That is why, at the end of the day, philosophy is so important. As Lord Keynes his ownself once said:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.

Which is why I read with interest an article at interfluidity (h/t Yves) with the dull sounding title "Partial equilibrium intuitions about choice." Here Messr. Waldman discusses (with a reasoned and, in my opinion, honest attempt at tugging at a thorny issue - all the while implicitly accepting the role of entities such as the Federal Reserve or governments to actively mold policies and peoples' lives to a "good" end - as defined by the political elites) discusses how it might be better to restrict emigration out of a country:

...It is not incoherent to argue that a country might benefit from retaining talented people, and it is not even incoherent to argue that individuals who would choose to emigrate might in fact be better off themselves if they as well as all their compatriots could be persuaded to stay and contribute to development at home. Most of us view freedom as a per se good, and for myself, I’d have a very hard time arguing for emigration restrictions anywhere. Model risk is a bitch. That you can tell a story doesn’t mean the story is true, and when the cost of error is uselessly confining people, we should subject our fairy tales to pretty strict scrutiny. Fortunately, the existence of choice is not binary. We can think of “no choice” as a choice where one alternative is accompanied by either an infinite cost or infinite payoff. (That is, I have “no choice” but to stay in-country if the cost of migration or the benefit of staying is infinite.) A state that forbids emigration at pain of jail or death attaches a large negative payoff to trying to leave. But a country might attach a modest cost to emigration, or perhaps subsidize the retention of talented people. This sort of “nudge” does much less damage to norms of personal freedom, and may well contribute to the welfare of both the people affected and the polity as a whole. Indeed, in the US, the same sort of people (like me!) who support open borders are enthusiastic about interventions intended to retain foreign-born entrepreneurs and graduate students by offering them valuable immigrant visas. Whether you want to call this proposal a subsidy or elimination of a cost, it amounts to using the instruments of the state to reshape people’s choice space in ways that are arguably good for them and good for the polity. And ultimately, that is something a state ought to strive to do.

Does this sort of policy translate to “more” freedom or “less”? You can’t say. Freedom is not a scalar quantity. Sometimes actions of the state render one alternative overwhelmingly preferable to any other, and so clearly restrict choice. But the opposite tactic — having the state reshape people’s choice space so that alternatives that become evenly matched and force people to make agonizing tradeoffs, hardly serves the cause of freedom. And in a world of prisoner’s dilemmas, laissez faire policy, leaving the “natural” choice space undisturbed, just turns notional freedom into a figleaf for predictably bad choices and outcomes. People often can and do develop means of cooperating and coordinating to avoid prisoner’s dilemmas without the assistance of states at all, or with forms of assistance that libertarians find unobjectionable, like enforcement of contract. That’s awesome. But the world is full of hard problems with very serious consequences not all of which resolve themselves. It is reasonable that ones enthusiasm for state intervention into the choice space of individuals is conditioned by how prone to corruption and error one thinks the state to be. But it is either simpleminded or cynical to rule out such intervention based on economistic arguments about how choice always improves welfare. That’s simply untrue...

I'll leave the debate aside for the moment. Having watched the U.S. political and economic elites behavior since 2008, I have my own thoughts on how "ones enthusiasm for state intervention into the choice space of individuals is conditioned by how prone to corruption and error one thinks the state to be" but that is not the point today.

What I want to draw your attention to is how the philosophical framework of tyranny gets constructed. Messr. Waldman sounds like someone who strongly values liberty and freedom, but that would not stop someone from taking the above general concept and turning it into a pernicious set of laws that would be continually ratched up, preventing freedom of movement to citizens in a Diocletianesque maneuver to keep people "in line" with the goals of ~~Goldman Sachs~~ local governments. Imagine telling a kid from an inner city background, or someone who has had a very bad experience growing up in a small town that they must pay a stiff tax to move - because it would be better for them and for their peers if they were kept in their place of birth, locked in and expected to work hard to lift others up or because it is for the Greater Good, according to a white guy with an Ivy League education and a tax-funded job?

Keep an eye on the intellectual whirlwinds that will pick up when we reverse this rally. A few short years from now, you may not recognize your country.

Speaking of War...

2012-03-15T13:45:00.001-06:00

The contributors over at Information Dissemenation are some of the best on the planet when it comes to current thoughts and trends in Naval warfare, so consider the following with care:

Preparing for War
by Galrahn, Information Dissementation

In chess, to achieve checkmate you must first position your pieces properly.

For years I've dismissed the topic of war with Iran. I just never thought it would happen, or at least knew we would see it coming so have repeatedly dismissed claims that war is near. We'll, this is the kind of movement I've been waiting to see happen before taking this too seriously as a legitimate possibility, rather than an implied one...

...In other words, the Chief of Naval Operations announced to the Senate Armed Services Committee this morning specific details about preparations for war with Iran, and in response the Senators drooled on themselves in silent capitulation. The only thing missing from that scene from this mornings Twilight Zone moment in the Senate was the CNO knocking on the microphone asking "is this thing on" for dramatic effect...

The February Socionomist Talks War

2012-03-09T16:26:00.001-06:00

The new Socionomist is out and the lead article is entitled "How Will the New Social Psychology Affect Military Action?"
It jives well with my amateur analysis - expect lot's of breakdown, terrorism, petty authoritarianism, and maybe some spectacular one-offs in the form of a terrorist nuke or bio-terror weapon that gets loosed on the world - but the Big One is (hopefully) is not due until we have had the plunge we are tip-toing towards at the moment, enjoyed the Supercycle Degree (b) relief rally, which sets us up for the second corrective wave down.

Interesting and worth pondering.

Hack Your Brain?

2012-03-09T10:48:00.000-06:00

I am a big fan of mental exercises, the "how" of how people think, and have a long-running interest in the literature on brain function and peak human performance - damn you Robert Anton Wilson for helping blow up my country boy paradigm a few decades back. A lot of literature has been popping up over the last few years on trans-cranial direct stimulation as a way of addressing the symptoms of clinical depression, as well as a method to induce the "flow state" and allow for rapid learning and mastery.

Human brain function in general fascinates me (hence my attraction to socionomics) and I've worked with light and sound machines over the years to generate interesting effects but little lasting change.

Well, I just stumbled across a site that was put up a few weeks ago to take pre-orders for a kit to build your own tDCS device. Looks like some college kids having fun, like Dell in the early days. I have signed up on the pre-order list. I am working on a self-experiment test plan. While I don't expect to become Limitless, I am very interested to see if I can improve math and verbal scoring (initially based on smartphone apps) as well as improve retention on my engineering work.

I'll post my results down the road for those interested in this type of thing as I continue to look for anything to give me an edge as we teeter here on the abyss...

More on Stock Markets and the Presidency

2012-03-06T13:45:00.000-06:00

I clicked over to Yahoo! Finance, watching the market decline today and saw this interview with Robert Prechter that goes hand in hand with the paper cited below.

Enjoy.

Socionomic Paper and Event

2012-03-02T10:19:00.000-06:00

Race to Nowhere, Donald Ely

Many of you will have already seen and read this paper, but just a heads-up that "Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results," by Prechter, Goel, Parker, and Lampert has been getting a lot of attention at the Social Science Research Network site. It is a good read and even better antidote to the political posturing we see during silly season.

Also, for those of you who have been bitten by the Socionomics bug, the 2012 Socionomics Summit will be held on April 14th, at the Georgia Tech Hotel and Conference Center. Register before March 9th and you save $50.

Strive

2012-03-01T10:14:00.001-06:00

Strive High, Julia Sonmi Heglund

I ended yesterday's post on a bit of a downer. The more I think about it, we don't need more negativity out there. For those of us trying to keep our heads up a bit more than the average citizen and peer over these choppy waves towards the horizon, we do see a new day dawning. Getting there may be rough, but the tough times shall pass and we will have yet another chance to rebuild on the ashes of this decayed and hollowed-out system.

On that note, while I still do think starting a business in this environment is a challenging endeavor, it is not hopeless, and, frankly, having a source of income that you have more control over than you would as an employee is going to be a necessity in our coming changed world. When applied correctly, technology is helping make it less hopeless to start a business every day. As an example, I want to highlight a recent posting by Tim Ferriss, a serial entrepreneur and wired, high-energy type of guy who pushes hard for people to start their own businesses in his book The Four-Hour Work Week, as well as on his blog. In a recent post, he talks about leveraging contests to help your start-up succeed:

“The Start-up’s Secret Weapon: Contests” or “How to Turn $100K into $12,000,000″
by Tim Ferriss

In the world of magazine articles, one of my all-time favorite headlines is “Anything You Can Do, I Can Do Meta” from the MIT Technology Review, a feature about billionaire programmer, Charles Simonyi. Charles designed Microsoft Office and is outstanding at looking at programming as different layers of abstraction.

How can we raise our perspective from 5,000 feet to 30,000 feet to learn a few things? This post will do that with competitions...

Read, enjoy, learn, apply.

Interesting Note: I stumbled across the society6 website and absolutely love much of the artwork I see there. I plan to use images from various works in many of my blog posts going forward. On a funny socionomic note, for today's post I plugged the word "happy" into their search feature. I received zero - yes, zero - returns. I plugged in "death" and received back over 1,000 hits. Now I know the stereotype of an "artist" is of a brooding genius, suffering for their art, but a disparity like that on a keyword search is amazing. We'll see if that changes once we round the turn on this, granted enormous, bottom coming our way.

Mood and Dow 13,000 Again, and Again, and Again...

2012-02-29T14:04:00.000-06:00

Mood, tod kapke

The DJIA continues to chop along here at 13,000, a mirror to a population growing frantic in the search for things to be optimistic about (or, as may be more likely, frantic in its efforts to not face up to the ugly facts that surround them in terms of a corrupt finance and political organism, massive indebtedness by the public and their elected governments, and Europe's slow motion implosion).

Culture Notes

As Friend of FutureJacked, WL, pointed out to me, cultural signs continue to abound that we are topping out in terms of optimism. Grasping at icons that bring back the fond memories of earlier positive mood eras, people have flocked to Whitney Houston, after her death, Madonna got scheduled for the SuperBowl and the Material Girl, along with the Beach Boys, are going back on tour:

Grammys 2012: More Beach Boys, less Maroon 5, Foster the PeoplePop and Hiss, the LA Times Music Blog

The surviving members of the Beach Boys, who will tour this year in honor of the band's 50th anniversary, gave fans a sneak preview at the 54th Grammy Awards. Though the lead-in with Foster the People and Maroon 5 was puzzling at best and cringe-inducing at worst, the Beach Boys' run-through of "Good Vibrations," while not an exalting return to the stage, was borderline heartwarming...

Madonna set for first Australia tour in 20 years
ABC News

Madonna is set to tour Australia for the first time in 20 years, exciting fans who were left devastated when the Queen of Pop bypassed the country on her last world tour...

Politics

President Obama has clawed his way back in the approval ratings from 38% to as high as 49% approval in recent days (according to Gallup), recovering along with the market averages. Mitt Romney, perceived as a very "safe" candidate on the Republican side, continues to pile up victories while potential "radical" opponents such as Ron Paul are consigned to the margins. In my opinion, as go the markets, so goes Obama's chances in November.

European markets and political leaders continue to be given more rope with which to hang themselves as mood in European core countries continues to hold up in the face of the coming Greek default.

War

The recent spate of attacks in Iraq, along with the riots that have accompanied the Qur'an "burning" incidents in Afghanistan, along with the recent reactivation of MEND activities in Nigeria point to a slowly boiling pot, but it does not have a feel of some out of control steamroller of war. Yet. That comes with the attack on Iran...

Preps

I've continued to puzzle over just how best to prepare, assuming the decline in mood, markets, social cohesion, and individual liberty will be one for the record books in many ways. I've suggested, many times, such things as:

You should acquire quality gardening tools, plant a small plot and get a feel for the growing of your own food, even in the most limited manner. It is productive work and while I don't expect you to be raising all your caloric needs via intensive gardening, it is one of those skills necessary to navigate hard times. A green house might not be a bad idea either.
You should build ties with neighbors and be ready to partner with them. If you have land, consider solutions that allow unemployed males of work/military age to use to grow, build, or otherwise occupy (ha ha) the land for productive purposes.
You should get a side business going that might have some chance of survival in a credit-starved, angry world.

Unfortunately, the more I think about these "resilient community" type solutions, the uglier the reality gets, especially if we think about implementing things like this in the early days of the next wave of the decline. If you build too much garden, many of you in Surburbia will get pounced upon by a Homeowners Association. If you (are allowed to) build a greenhouse, that will have tax consequences in many communities as you have improved the land. If you build a substantial greenhouse and consider selling produce, expect a mountain of junk fees, regulation nightmares, and local petty bureaucracy to try and strangle your ideas in the crib.

If you have acres of land and want to let a family build a modest place on your land, or otherwise "improve" it, then expect your property taxes to jump. If you want to employ local youths to do labor in exchange for meals or other in-kind work or a little cash to have in their pockets, consider that the various taxing authorities will be all over you for how that labor is treated for tax purposes, or that wage you are paying them is accounted for, etc.

Ditto the agony of starting a small business in an environment of significant local taxation and regulation. We won't even mention the coming credit crunch and what that will do to marginal business opportunities.

Now, many of these things will "work themselves out" over time - as you get strong and, shall we say, spirited opposition to the things holding us back from finding a bottom and beginning the recovery, but it will be painful, and many people who want to do things we regard as good - such as help their neighbors or run a business, will get tagged as criminals between here and the there of recovery.

I don't have good advice, other than to be aware and do the best you can. The longer we levitate this thing, the uglier the fall is going to be, in my opinion. We are setting ourselves up for the the Mother of All Plunges, and with nothing to cushion the fall - no network of small family farms to absorb productive talent, no resilience built into our energy use patterns, no national bank account to draw from or to use as collateral for new credit. Have a lot of popcorn on hand. Watching this thing unwind is going to be the biggest horror show in 200 years...

Extreme Contingency Planning

2012-02-24T13:26:00.000-06:00

While we continue to hold this amazing (and in my opinion, almost frantic) level of optimism as expressed in markets, as well as in the rising of President Obama's popularity from the ashes, the nature of the coming decline has me very, very worried. I especially worry about the next war, frankly.

As part of that, if you want to indulge in some worst-case planning, click over to Alex Wellerstein's NukeMap. This is a tool that lets you use Google Maps to drop a variety of nuclear warheads, from an improvised terrorist nuke to the largest bombs ever tested or deployed, anywhere on the map and see the expected results. Note that the blast pattern shown will not include effects of terrain and is an optimized air burst (in other words, the blast you will see is a worst-case type of scenario).

This is not really meant to be disaster porn, but if you are concerned that nuclear war could accompany the coming era a deep negative mass sentiment, then this tool may help you at least see what a nuclear strike could do to places of interest to you and yours.

Imagine Trying to Enforce This

2012-02-22T09:29:00.000-06:00

I've not blogged much on Greece as I think they are only the sideshow, but they do provide a small-scale experiment, much like Argentina a decade ago, to demonstrate what the political elites are going to attempt in the U.S. and throughout Europe when the debt bomb goes off in the "core" of those regions.

Imagine trying to enforce this on your citizens, lowering pay retroactively:

Greek austerity moves leave nation's economic safety net in tatters
Roy Gutman, McClatchy Newspapers, Febuary 9, 2012

...As Greece's political leaders struggle to reach an agreement with international lenders before a March 30 deadline, the toll is growing from an austerity program that promises only to get tougher. Greece has been living beyond its means for decades, and now the little man is paying the price...

...For Delpina Koutsoumba, however, this is a winter of discontent. She's 37, a trained archaeologist with a master's degree who works for the ministry of culture's department of "aquatic antiquities," issuing licenses and supervising construction of ports, hotels and other investments on Greece's storied coastline. Her take-home pay last month was $860.

"I'm an archaeologist, married with a child. Of course, I cannot live on this," she said.

Nominally, she earns $1,190, but late last year the government announced that it was lowering salaries retroactively - and docking everyone's pay accordingly.

"They told us: 'You owe us money from last year.' And they take whatever money they want," she said. So for three months, it's a starvation salary. Her apartment alone costs $730 monthly...

Emphasis mine.

This is another example of the "brittleness" that worries me so much about our current system. If a crash hits, then everything goes down at once. Docking pay has massive knock-on effects. It will kill debt service, which will exacerbate the situation. Docking pay and layoffs have to happen, though, due to the massive amounts of leverage in the system and because the financial elites own the governing structures and are preventing Greece from pulling an Iceland and defaulting on the debt. This leads to further unrest, an excuse for more anger, and feeds conspiracy theories.

This is coming to North America. It will leave no one untouched.

The Geography of Dependence

2012-02-17T16:28:00.001-06:00

Hat tip to John Robb over at Resilient Communities for a link showing the geography of government dependence. This is an interactive map produced by the New York Times that shows "[g]overnment payments to individuals in more than 50 benefit programs, from food stamps to Medicare."

The Geography of Government Benefits

Part planning tool, part warning system. When the debt bomb goes off, those relying on transfer payments will suffer mightily if not prepared - and in large enough numbers, they will be able to make sure others suffer mightily along with them...

Great Quotes

2012-02-14T09:20:00.000-06:00

Too busy for a full blog post, but I just read an article and had to share some of the fantastic quotes:

The True Value of Money – or Why You Can't Fart a Crashing Plane Back Into the Sky
by Charlie Booker, The Guardian

...Banknotes aren't worth the paper they're printed on. If they were, they'd all have identical value. Money's only worth what the City thinks it's worth. Or, perhaps more accurately, hopes it's worth. Coins should really be called "wish-discs" instead. That name alone would give a truer sense of their value than the speculative number embossed on them.

The entire economy relies on the suspension of disbelief. So does a fairy story, or an animated cartoon. This means that no matter how soberly the financial experts dress, no matter how dry their language, the economy they worship can only ever be as plausible as an episode of SpongeBob SquarePants. It's certainly nowhere near as well thought-out and executed.

No one really understands how it all works: if they did, we wouldn't be in this mess. Banking, as far as I can tell, seems to be almost as precise a science as using a slot machine. You either blindly hope for the best, delude yourself into thinking you've worked out a system, or open it up when no one's looking and rig the settings so it'll pay out illegally...

It is the frantic drive to maintain that suspension of disbelief on the part of the public and the media types they choose to pay attention to that is driving the current insane policies. When that suspension of disbelief fails, well, that is what this blog is pretty much about...

Skynet Begins to Learn at a Geometric Rate

2012-02-07T12:40:00.000-06:00

Nanex Research

Nanex Research has put together this excellent .gif to illustrate the rise of the algos driving HFT. (h/t Mish)

Like all geometric series, this one starts slow, but it ends with a bang (or will it actually be a crash?).

I know that humans wrote the code, but do they really know what all those algos are going to do when the humans interfacing with the market start relentlessly driving the price "signals" down, down, down? Can you say Flash Crash from Hell, boys and girls?

The Terminator: The Skynet Funding Bill is passed. The system goes on-line August 4th, 1997. Human decisions are removed from strategic defense. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, August 29th. In a panic, they try to pull the plug.

Sarah Connor: Skynet fights back...

Remain calm. All is well.

The Tilting of the Megapolitical Balance?

2012-02-03T15:26:00.000-06:00

We've discussed the theory of Megapolitics before (recently here, a good book here) - a theory that states the technology of violence shapes political and social systems, along with informing the attitudes of those who live in or oppose the societies that employ that technology. If socionomics is the river sweeping us all along, megapolitics describes the types of boats we'll sail in on this river, as well as how the crew interacts with the passenger, so to speak.

I've been carrying in my head the idea that tech trends have been shifting the balance towards defense. Automatic weapons, putting "brains" on missiles (and now even on bullets!) allowing for cheaper "smart bombs," cyberwarfare, etc. A balance towards defense would imply more ability for smaller political and social units to wield violence for their own ends at the expense of larger political or social groups. It also makes empire hard to do and much more expensive.

In the future map I've been trying to build, I've pictured this technological trend receiving deep reinforcement from the expected deep plunge in mass mood. Thus, I am anticipating secessionist movements in portions of the globe that should succeed, along with a significant rise in the power of non-governmental entities to wield violence against run of the mill citizens of nominally sovereign states.

Negative mood swings during megapolitical eras that were tilted in favor of offense might be expected to lead to temporary rebellions easily put down by a central government (the Paulista War of 1932 in Brazil is a prime example). Negative mood swings during megapolitical eras tilted in favor of defense could lead to succesful secessionist movements or long, drawn out wars.

Offense Gets a New Tool?

Then I watched this video, made as part of a research project at UPenn (h/t John Robb):

You may be saying who the heck cares if a bunch of toy helicopters can be programmed to fly in formation.

Well, I think you will care, especially if authoritarian governments, criminal cartels, and corporate persons get out in front of the rest of us in using these technologies to compel obedience, shake down a target for cash, attack their enemies and, in short, conduct Drone Diplomacy.

As Theorist/Red Teamer John Robb puts it:

...It allows truly scalable global coercion: the automation of comply or die.

Call up the target on his/her personal cell (it could even be automated as a robo-call to get real scalability -- wouldn't that suck, to get killed completely through bot based automation).

Ask the person on the other end to do something or to stop doing something.

If they don't do what you ask, they die soon therafter due to drone strike (unless they go into deep hiding and disconnect from the global system).

With drone costs plummeting, we could see this drop to something less than <$1000 a strike in the next half dozen years (particularly if kamikazee drones, like Switchblade, are used to reduce explosive payload requirements)...

Very soon, drones won't just be for "terrorists" any more. They are already coming to U.S. cities. You may be sure those drones over U.S. cities will soon be weaponized, especially if our expectation that mass mood will get very negative very soon pans out.

Then what?

The 4th Amendment no longer applies to U.S. citizens targeted by drone strikes. Mood will be shifting hard towards some level of acceptance of an Authoritarian state by much of the population. Those folks out there considering bunkering down in a survivalist retreat won't be any more protected than some unaware shmoe in the suburbs.

The Lag

The one hope that I can see would lie in a balance of terror. Drones can be built cheap. You can buy a kit today to build your own "complete UAV solution." Might be something to get into now. Communities and groups are going to need to be able to retaliate to non-Constitutional uses of force against them (the 2nd Amendment back and better than ever) by corporations or non-Constitutional governing entities, otherwise they risk being on the wrong side of the technological "lag" between the first-adopters and the left-behinds. If you have technological means to do unto others as they might do unto you, one can hope to avoid the fate of American Indian tribes that faced the onslaught of the European migration, or the African tribes that fell to European colonialism. The tools did exist to allow these tribes to resist, but they could not be adopted quickly enough, nor were they advanced enough to stand up to industrialized powers.

It would be a return to an almost Medieval style of thinking - which would fit like a hande in a glove in our era of deeply negative mass mood.

Much of the lag will also be in our heads. As we've discussed before, our mental software is going to have to undergo a significant upgrade in order to deal with the changes barreling down at us.

Keep an eye on the sky. Set up a Google News alert for drones. Buy an Arducopter kit and get good at your new hobby. You may be needed by the Republic in the future.

The Brittleness of Stupidity

2012-01-31T10:30:00.001-06:00

The "brittle system" idea has been bouncing around here for a few weeks - the idea that the U.S. and many other Western governments and societies have systems in place that allow for no flexibility or the entire thing comes unwound. This is especially true in the paranoid/crony capitalist/security state machine which requires terrorists behind every For Sale sign in America.
Here is a story out of LAX that illustrates what happens to the "Security" machine as it plays out towards the unraveling:

US bars friends over Twitter joke
by Andrew Parker, The Sun

Two pals were barred from entering the US after innocent tweets joking about "destroying America" were picked up by the country's anti-terror cops.

US special agents monitoring Twitter spotted Leigh Van Bryan's messages weeks before he left for a holiday in Los Angeles with pal Emily Bunting...

...They spent 12 hours in separate holding cells and were then put on a flight home.

Leigh, 26, was kept under armed guard in a cell with Mexican drug dealers. The Department of Homeland Security flagged up Leigh as a potential threat when he posted a Twitter message to his pals ahead of his trip to Hollywood.

It read: "Free this week, for quick gossip/prep before I go and destroy America"...

It is this kind of nonsense that, if allowed to continue to metastisize, that will undermine what is left of the Republic. Everything is a major emergency in the eyes of the paranoiacs in the Security State. There is not room for gradation or risk analysis or anything approaching an adult response to this. It is either, you are a subject of the empire/tax sheep or you are a target.

Plus, this kind of thing leaves the "Security" services wide open to spoofing and hoaxes. Ugh.