Benoit Mandelbrot thinks we're all screwed

[Pharaoh]

Run time: 10:16 https://www.youtube.com/watch?v=DLFkQdiXPbo   Posted on YouTube: October 23, 2008 By YouTube Member: dogshu Views on YouTube: 73473   Posted on DU: July 15, 2010 By DU Member: Pharaoh Views on DU: 637

 
Benoit Mandelbrot thinks the global economy is in dire straits.

[vaberella]

1. 60s over cotton? That was when many of the people working on cotton plantations..

were on strike for the civil rights movement---which would have been another and far more significant reason. Many Blacks quit their positions or did not go to work basically handicapping the United States economically until they received their full rights, protection of those rights, and desegregation.

[xchrom]

2. There's a down turn coming - a bad one -

And that's why corporations are holding onto cash.

[nashville_brook]

5. deflation is coming...that's why they're holding cash. it's becoming more valuable.

[Xipe Totec]

3. Similar to the perils we've created by trying to tame the Mississippi

The more levies we build to keep the river in it's banks, the more likely it is that when the river finally overflows, it will be a catastrophe.

We are building financial levies to keep the economic system from flooding. This makes crashes less likely, but when they happen they are more severe.

[HysteryDiagnosis]

4. Maybe so but we are still beautiful... don't you think?

[fascisthunter]

6. Haven't more People Thought about This?

I've been thinking about this for years now... the global economy is a fragile globe of glass... when there is a crash, it doesn't just break, it shatters. Now lets imagine this on a very human/personal level.

The human element is nothing more than a statistic to most sociopaths, that is as long as their own asses aren't on the line. Those sociopaths are the ones pulling a lot of the strings. They thrive on Wall Street and in all the markets around the globe. Too many sane people bought into their system, way of thinking.

[PufPuf23]

7. Book marked. Even in a non-manipulated market,

prices are fractal and not random nor binomial nor etc.

Normal distributions at first glance with long chaotic tails.

Mandelbrot (and Taleb of Black Swan) don't think the finance engineers / masters of the universe understand their own algorithms.

Now I have to watch the video.

[PufPuf23]

8. Just watched the video and called it in last post.

Hedge funds are based on the same math and better computers than the program traders with "portfolio" insurance that blew up the market circa 1988. There is no way to rational value 3rd, 4th and so opn derivatives except mechanically (as opposed to using Black-Scholes and refinements for futures and options and putting an automated trade portfolia matrix optimized by dynamic optimization. Works great as the large traders can face a different risk-return profile than other investors until the unusual. Glass-Steagall prevented moral hazard and Glass-Steagall (and Sherman Anti-trust) protected the economy by not allowing too big to fail and the ability for major market manipulation.

To correct the narrator: Mandelbrot's work regarding cotton prices as scaling fractals occurred in the 50s, not the 60s. See The Fractal Geometry of Nature and Fractals and Scaling in Finance also by Mandelbrot.

[Pharaoh]

9. This is his best work here

http://www.youtube.com/watch?v=qB8m85p7GsU&feature=related

The discovery of the Mandelbrot set in 1980...........

[PufPuf23]

10. I can't that YouTube to work

Fractal graphics are pretty.

For example, fractal image compression is a tool to allow fast transfer of graphics over the internet.

Each showing of a jpeg is like a snowflake, unique, but we can't tell because of the level of resolution.

Mandelbrot was publishing academic papers in the 1950s as an extension and made useful to technolgy the work of Poincare.

Computers helped much.

Finance people saw the usefulness but occluded in the 70s to date.

The math as an alternative to Euclidian math is useful in biology, finance, etc. -- any dynamic system.

I like that the variance of a stochastic fractal is infinite just because. Peace friend.