Was that interesting event that improbable?

 

If one’s attention is drawn to an event of interest, how does one post hoc try to work out the probability of that event?

It is a common event that we hear of extra-ordinary coincidences. What is improbable going forward say the probability of a meteor hitting our house, is much more probable if we wait for an interesting event of unspecified description and then work back. This “framing” problem is what makes the probability so hard to determine. A probability is calculated as a ratio of the actual event count to the potential event count, and when we allow for any event there are is a vast array of potential improbabilities to select from.

As an approach to this problem consider waiting again.

A rare event occurs in time t. If we accept the frame now decided upon by that event, we must estimate the mean.Using exponential distribution the significant probable mean must fall between 0.05<=p<=0.95.

p = 1-Exp(-r x), r = -Log(1-p)/x

0.051 <= r <= 3.000

So stopping the clock when an event of interest arises means we can safely conclude that these events are occurring at between 0.05 and 3 per this time interval. Given that 3 per this time interval is unlikely to be interesting the range will be biased to the rare side, but how much?

Another approach might be conditional probability. Given that the event is sufficiently rare to be of interest what is its improbability!

The Math of Waiting

Too long waiting for buses and other uncertain events leads me down this road:

Given an event occurring on average at 1 per hour (m = 1) we can see the probability of the event having occurred after m hours with the exponential distribution.

Some values of p for t:

x	p
0	0
1	0.632121
2	0.864665
3	0.950213

If expecting an event on average every unit of time U then after 3 units of time the probability that your expected event should have happened is greater than 95%. On a 5% confidence limit you can reject your hypothesis that events are following your expected model.

e.g. So if tubes are expected every 5mins on average (and assuming they arrive randomly!) then after 15mins we can reject this idea that they are arriving every 5mins… something has most probably happened to disrupt the service.

If you take tubes on this random line regularly then 63% of the time you would have boarded a tube after 5mins, and 86% of the time after 10mins.

Conversely: if you have been waiting for less than 0.0512933 units of time and an event happens then you might want to review ideas about the event happening every unit of time.

And if an event from an unknown distribution happens then you know the average unit of time is at least 1/0.0512933 = 19.5 times as long as you just waited.

In the case of the recent Russian plane crash over Sinai. It has happened a little over 1 month after starting operations in Syria. If the two events are lined then Russian plane crashes must happen no more than every 19.5 months.

In reality this model is overly simple as such events vary around a mean of the expected time. But as a crude rule of thumb 3 x the unit of time is a start.
 

         

The Second Mirror & Peace

 

The Mirror test is the test for self consciousness. Does an organism respond to its reflection the same as it responds to other organisms or is there a difference. This is the 1st Mirror. Non social animals will treat their reflection with territorial behaviour and escalate into violence as the reflection becomes more and more threatening. There is a paradigm shift where the organism grasps the reflection as self and stops the loop.

There is a second mirror however. Individual organisms can be trapped in escalating violence as each becomes more hostile to its opponent, who becomes more hostile as a result and justifies escalation. Normally escalation ends when one side judges itself to be likely to lose a conflict and the better option is submission. In the case where opponents are similarly matched conflict is the only conclusion hence the problem with the first mirror. Analogous to the 1st mirror there is a paradigm shift where the organism grasps the sense of “us” and doesn’t escalate conflict with other individuals.

UK Debt – what a load of nonsense… and Iraq… and everything!

Been on Facebook with this one continuously, can’t remember if its blogged. Just crudely throwing this together, but complete analysis shows the same picture…

Grabbing UK debt off Google… (1995 to 2013)… Debt has been stable or falling over a long period up to 2007. Then doubles from 2007 to 2010. Where did this debt come from? But firstly is it falling GDP?

UK GDP off Google… (1965 to 2013)… GDP falls 11%. So no that is real debt in the public purse.

 

Famously there was an economic crisis in 2007. Debt famously was created in banks by them buying US mortgages that would never get paid off. Much of the debt was secretly parcelled in the infamous CDO (collateralised debt obligations). This is the official story.

So we have been told that the debt was created in the US housing bubble, that banks bought that debt, and that the UK government then bought the debt off the banks to rescue them from collapse.

So we know the debt came from the banks.

But the political parties in the UK, including Labour, seem to think it was normal government over-spending (welfare, health, education, defence etc), despite the fact they’ve told us that it was bailouts to the city, and that all the excess debt occurred since 2007.

Clearly the political parties, the media and indeed almost everyone is confused. Yet despite being confused they all agree. How is this possible?

It can only be that they’ve all been told to disagree with what they were saying. Obviously the banking sector is massive and powerful; actually the most powerful. The UK Conservative Party gets almost all its funding from the City. The “conspicuous absence” of The City in contemporary explanations of the UK debt. And the total lack of presence of the ostensible culprits means that this is a full scale “cover-up”.

We’ve seen it recently in the Iraq War (2003 to 2011). Originally Iraq was linked to 9/11. There was no evidence, and the US failed to mobilise its more sensible allies to involvement. Then they used the risk of Saddam’s weapons and their potential threat. SCUD D missiles have a maximum range of 600miles giving them access to targets in Turkey, Iran and Saudi Arabia (and of course Israel). Hardly a “clear and present danger” to either US or Europe. Satellite photos of trucks and buildings was presented to the UN as evidence of chemical weapons (no-one was fooled). The BBC criticised the government, was made to look like they did something wrong (in a “free” nation?), and has never been very compliant ever since, and two other critics also died (coincidence). However unfortunately (and inexplicably) some US allies did accept the idea that Iraq was a threat and the UN passed a resolution, and a war happened.

Obviously Hussein had long ago removed his weapons (which he was sold by France and Britain anyway), since he didn’t want to antagonise the US more than necessary; and predictably no WMDs were found. This was not the reason for the war anyway, just an excuse. Once WMDs were not found, and “no threat” was proven, the US didn’t apologise and withdraw, instead they executed Hussein (logical). The new “reason” became a humanitarian crusade to free the people of Iraq. Just as Alexander the Great did in the 4th Century BC. One wonders why they didn’t present this excuse to the UN in the first place. Despite this transparent sequence of events, the “conspicuous absence” of a sensible description by politicians and the media and the persistence of the idea that the war was “justified” is much the same as the denial of the source of the UK Debt. Rather unfashionably these are called “cover-ups”, but if they aren’t then the word should be removed from the dictionary because there is no better example of “cover-ups”. The Westminster Paedophile scandal which is exploding in slow motion in the UK gives some idea of the duration and water tight nature of the establishments ability to protect itself, cover-up and generate false news.

Personally I wouldn’t mind so much, but exactly the same establishment rejoices in the ability of other world leaders (conspicuously of enemy states/groups) to generate propaganda, while never acknowledging that it is perhaps the World’s best… but then which compulsive liar would ever admit they were a liar. (Politicians never tell the truth. I am a Politician.)

Serious Economics

Given that The City has got us into this fine mess, what options do we have? The standard Keynesian solution has been to buy our way out of recession, but we have been doing that since the dotcom bubble crash of 2000. But our modern economies only survive by continued, unending financial stimulus anyway. Its not a fix for times of crisis, it a fix for normal running these days! We can be sure that even if all “normal” government spending ends we will still be paying high taxes just to prop up the economy (stimulate inflation, keep people spending, create jobs, and direct bailouts like UK selling Gold in 2000 etc).

But if we don’t prop up the economy then the whole house of cards will come down. UK still has a housing bubble, much private debt is offset against the value of houses. If there is deflation, or market sentiment turns seriously bearish the crash will be catastrophic. There is the fear of UK borrowing costs increasing also, finally hoisting the UK on the petard it has terrorised the rest of the world with for several centuries. The ostensible panic solution has been to sell off more of the state; not much to privatise any more (though the NHS is being cut up bit by bit, like the rainforests), the only thing left is to divert tax money directly into the National debt.

The Party Faithful will say that this “panic” solution hasn’t come easily and the Conservatives are at pains to do it. But sceptics will see the long term Tory plan of sell offs and handing of power to their backers in the City.

Taking stock of the situation however, it’s all a bit odd. From Reagan and Thatcher to the relaxing of the Glass-Steagall and the UKs market liberalisation until today the path has been one of giving more freedom and money to the City and the markets. And where has it got us? People point to the great progress in technology (the telecommunications revolution, the miniaturisation of electronics and iPads) and the global markets with a greater variety of foods and cheaper clothing. But all this was happening anyway. In terms of fundamentals life since Thatcher has been harder. Real wages are lower. After the boom of council house sales, we now have a private housing system and an inevitable boom meaning that most people will never own a home; paying debt for the rest of their lives. Job security is lower, with competition from overseas markets, shorter more flexible contracts, and that same telecommunications revolution creating machines that have taken jobs. To the winners the dynamic nature of modern economics is a dream, but to the losers it is the worst nightmare. And this is reflected in the inexorable growth of inequality. While the rich, feasting on all those bailouts and financial support from the tax payer, celebrate; the tax payers (employees, and start up businessmen) who must shoulder all the burden of economic uncertainty and risk; they live lives of increasing difficulty.

And all this in an post-industrial technologically advanced economy existing 4500 years after the Neolithic economy had the surplus wealth to erect StoneHenge. Wealth and production haven’t been issues for mankind for 4000 years, and most certainly not the problem today. The problem, and the source of Mankind’s toil today is economics and its misuse (either through ignorance or design) by those who have the responsibility and the wealth to ensure it, not us, works!

So UK Debt? It’s a load of obvious nonsense.

FTSE Bearish at last? Correction due?

RSI in a falling channel, (not gone below 40% yet so not confirmed, but falling from 70% for 2 years). So despite the annual “santa rally” not much bullishness in FTSE… I’m cautious!!!

Generalised Cauchy Distribution

The function I discovered a few years ago turns out, on re-examination, to be a generalised Cauchy Distribution:

Where x is the variable value, and parameters ‘m’ is mode, ‘s’ controls fatness, and ‘a’ controls kurtosis. I assume, like Cauchy, it has no moments, but need to explore.

With a = 1, s = 1 it gives the Cauchy Distribution :

 

With a = 2 it gives a useful distribution with fat tails, fatter body and with mode similar to Normal and LogNormal. ‘sigma’ appears to be derivable from standard deviation here!

This has a Cumulative Distribution :

 

If C( x) is the Cauchy Distribution then GC2(x;0,1) = 2 Pi C^2

The New Economy

What is the Old Economy?

It is based on Free Market. A person who has something concrete may swap a number of these for a number of something concrete another has. The addition of money with fine denomination acts as a lubricant to enable very fine exchanges.

This system of exchange has the been the World's leading means of "communication" enabling the accurate transfer of things to where they are needed, and the accurate instruction of people to make what is needed.

It is accurate because with violence and a legal system to stop what is called "theft" you cannot transfer false information in the system. If I want something I cannot get it without actually having something to exchange with it.

The other means of communication that has developed is language. Undoubtedly language (and mathematics) have arisen because of the market; to augment this system of communication for example in laws and accounting to stop theft. But language and maths has developed a very great deal in its own right and now challenges the Old Economy.

First attempts to challenge the Old Economy came as reactions to what was perceived as injustice. People with large amounts of wealth could use this to exploit poorer people and so grow ever more wealthy. Laws and maths were turned to abuse the system, as well as support it. These challenges sort to replace the markets with a reasoned transfer of wealth, by central bodies of people. However while abuses to this system did occur (although nothing like as bad as under the free market system), more funds were available but the weakness was lack of information to ensure that those funds found the right recipients.

With the advent of The Internet and with the ability of automated machines to watch communications it is possible now to gain information about the population in even greater resolution than through markets. It is a wonder that the US and UK governments don't sell trading information as they will know not only every trade that occurs but also the market moods and trends in social media before they even occur.

On the one hand such information gives enormous power to central bodies which is dangerous, but if the military and "national security" (what ever they are) were forced the free up this information from the private to the public realm (as indeed they did The Internet itself) then an economy could run without the need of old fashioned trading and the major problems of injustice and exploitation with the Old Economy could finally be solved.

===

Alternative point. Opening up the massive productivity of oil and machine based economies to the "masses" could lead to a population explosion. As Malthus argued populations will increase to exploit resources and so re-create poverty through competition. In this way humans are governed by the same laws as bacteria in a petri-dish.

There is also the problem that in the current system those who are able to maintain complex roles in the system tend to have little time for childcare, which means those who are unable or unwilling to take up roles in the system tend to have more children. This will genetically alter the human population toward a tendency to be either unable of unwilling to perform functions in the society.

The Old System solved both these problems by ensuring that poverty reduced populations in those who were either unable or unwilling to take up positions in the society. This is the typical right-wing position in the UK. While reasonable, it is brutal and leaves very little hope for mankind. It is also partially wrong.

It appears that wealth has reduced population growth in the West. High fecundity appears to be a response to poverty as much as a cause of it. The poorest countries currently have the highest birth rates. There is intense selection for genetically physically fit individuals, and in a reversal of the UK right-wing position, the wealthy in this country with their good healthcare and easy living have bred the genetically physically weakest of global individuals.

But genetics is only half the picture. While the wealthy in the UK are genetically physically the global weak, their good lifestyles mean they are actually the globally most healthy. Environment is as important as genetics. Recent studies show that intelligence is 50% genetic and 50% environmental. When the poor are unable or unwilling to work this is 50% due to the poverty they experience.

This argument is part of the way to suggesting that while the Old Economy focuses on the genetic half of causes, the New Economy will focus on the environmental half. With support, opportunities and education those under-achievers in society can become the achievers.

Clearly the markets of the Old Economy have failed the majority of the World. It has created a world of haves and have-nots and all it can do is raising the overall heat of the economy to benefit the poor, it can't change the structure. This is wasteful and extremely damaging to the planet.

Under the New Economy of rapid communication through modern technology the vast wealth of oil driven societies can be more accurately focused where it is needed, removing the inefficient inequalities and generating justice. Painful to those who have been brought up in the climate of competition and feeling good based on what they have achieved, but a joy to those who live in a climate of fairness and sharing and who take pleasure in the the welfare of their neighbours.