Artificial Intelligence?

[JK]

Economics concerns the production and allocation of goods, services, and the utilization of labor in that process. Capital is the primary method and means of determining the priorities within that system.

Currently, our world economy is in crisis. At issue is the creation of wealth, and the abuses surrounding the unregulated globalization of this process from the control of nation-states.

Specifically, wealth and capital are no longer tied to something tangible. Where once it was the function and reflection of the monetary policy of a specific country and its assets, it has now evolved to reflect the leverage and unregulated expansion of new financial instruments on a global scale.

Terms like "hedge funds," "sub-prime meltdown," and "bundling, packaging, and collateralization" of these financial instruments litter today's popular media.

At the core of this crises are the use of electronic transfers and computer programs that allow for the leveraged trading and manipulation of these newly created financial instruments.

For example, a single "rogue trader," at France's largest Bank, was able to LEVERAGE a trading position in the world's currency market to TWICE the total assets of that Bank ($72.0B versus $36.0B), before being caught.

Simple put, today's world markets regularly reflect AUTHORIZED global trades and transactions that routinely are plus 90% leveraged.

To manage these mind-boggling risks, financial institutions attempt to incorporate computer programs, based on artifical intelligence, to maximize gains and minimize losses. Unfortunately, their parameters and assumptions are based upon past history that may or may not apply or be valid in future events.

In summary, our world's wealth has been grossly inflated due to the leverage and collateralization of financial instruments. This inflation totaly supercedes the monetary systems, policies, and regulations of individual nation-states.

In conclusion, where once countries had to go to war to gain natural resources and the assets and treasure of neighboring countries, now global institutions can conduct the same results with the mere key stroke of a computer and the manipulation of a computer program.

FWIW

J.K. :wow

[JK]

Really nice, but how does financial globalization gambling affect me?

Remember, profit provides the reward and incentive for allocating capital and adjusting economic priorities.

Why build and make stuff, when your time energy and effort are better rewarded at the global casino?

When tens of TRILLIONS are "lost" in the current sub-prime shell game, you certainly should worry. In less than two months from the collapse, the US Congress and World National Treasuries authorized the "printing" of more money to prevent the liquidity crises from collapsing the entire world economic system.

Clearly, money talks, when those with special interests shout at politicians.

Simply said, no such special infusion of capital shores up our Social Security and Health Care System.

Likewise, funds for education and rebuilding our National infrastructure are severely lacking.

Sadly, the seeds for this impending crises were sowed when Federal legislation removed restrictions preventing the Banking Industry from speculating in financial instruments and their derivatives. By allowing them to inflated their "bets" on debt, equities, commodities, and currencies, our entire global system has run amok.

Bottom line, corporate welfare begins with taxpayer bailouts. And you and I are the ones that eventually pay the bill.


FWIW

J.K. :wow

P.S. A neighbor of mine, Kim, is an entrepreneur and venture capitalist who designs artificial intellegence computer programs/systems that control trading and risk management.

And it's our pension dollars and retirement portfolios that are funding and fueling this folly.

[From MARS]

JK, when you first appeared on the scene, I thought some of your post were, well, juvenile, and thus, you were juvenile. You have my public apology for my private thoughts. Over the last several months, I have read each of your post and have found them to be very informative and reflective of experiences most of us have never had. I thank you for taking the time to express yourself.

I want to specifically thank you for the enlightening post about water boarding that was in the old DGT. As someone who has always felt that the most horrible of circumstances would be to find myself in a situation in which breathing would be restricted, I believed you when you said that you could get anybody to admit to anything by subjecting them to water boarding.

Thanks again for adding to the mix on here, and once again my apology for ever thinking there was anything juvenile about your thought processes.

Tom

[JK]

JK, when you first appeared on the scene, I thought some of your post were, well, juvenile, and thus, you were juvenile. You have my public apology for my private thoughts. Over the last several months, I have read each of your post and have found them to be very informative and reflective of experiences most of us have never had. I thank you for taking the time to express yourself.

I want to specifically thank you for the enlightening post about water boarding that was in the old DGT. As someone who has always felt that the most horrible of circumstances would be to find myself in a situation in which breathing would be restricted, I believed you when you said that you could get anybody to admit to anything by subjecting them to water boarding.

Thanks again for adding to the mix on here, and once again my apology for ever thinking there was anything juvenile about your thought processes.

Tom


Thanks Tom -

Been to Sub-Sahara and personally seen stubs of mutilated limbs, maimed by machetes, in the name of un-civil wars. Took troops in and out of Desert Shield/Storm that related chem/bio warfare alarms/alerts, while our military and political leaders publicly claimed otherwise. An AF Academy friend, AF Reserve Officer, and NWA pilot unsuccessfully ran for Senator in Alaska, while spearheading the disclosure of adverse medical reactions to manditory anthrax shots and their long term consequences.

Sadly, there's some extremely serious bad stuff out there. When our best military intelligence agencies grossly underestimated Soviet chem/biological capability, BY A FACTOR OF TEN, we can no longer whistle while walking past the graveyard.

Just like our deliberate military "experiments" on our own unsuspecting troops, with operating under nuclear fallout conditions in the 40s and 50s, and LSD and Agent Orange in the 60s, it takes a generation, or two, for the honest truth to finally come out.

But that stuff is small potatos compared to the clash of leveraged trading (AI)computer programs that are manipulating our world markets and global economy.

When our largest insurance and investment corporations come crying to Congress about the impending carnage and unprecedented losses, it's time for the public to take notice.

We're only four score away from the last great world depression that was caused by similar abuses of the capitalistic system. Given the social and political upheaval that that crises created, today's potential threat of major disruption is just as real, if not more so.

IMHO


J.K. :wow

P.S. With the biggest governmental bailout of world financial institutions, in human history, hardly being given notice by our Presidential candidates during the campaign process, it's truly time to be seriously worried.

[glurkus]

I agree with you JK. I think there is some serious dodo going on with our economy.
I see the root of it as the U.S. losing it's manufacturing base to overseas competition, causing our economy to continually get weaker.
There was a Frontline show on PBS about a year ago that said in the last four years, the average family of four has had $30,000 of their income siphoned from them to China.

[beemerred]

That siphoning is probably done through retail outlets like Wal-Mart ( but not limited just to them ) because the average family does not or is not able to invest in the China economy. Although, it does effect our economy in other ways also. The Chinese are buying every big crane and construction equipment that they can get their hands on and most of those are built here in the States. The financial industry must be able to control the private institutions much like the gov`t. did after the Carnegie`s, Rockefeller`s, etc. created problems at the turn of the 1900`s. If not Chaos! I`ll keep reading because this is very interesting to me even though I`m only a truck driver and don`t always "get it".:bolt

[From MARS]

JK, please continue to share.:ear
Tom

[JK]

JK, please continue to share.:ear
Tom

In 1998, Congress repealed the Glass-Steagall Act of 1933.

In an effort to prevent another stock market crash and Great Depression, Congress created a regulatory wall between Main Street (Banks), Insurance Companies, and Wall Street. Simply put, there was an inherent conflict of interest between the mixing of those financial functions, and the checks and balances against market speculation/manipulation these restrictions provided. :deal

Clearly, the creation of unregulated equity, debt, and commodity financial vehicles (and their derivatives) contributed to the current global crises. With an estimated $100.0B to $300.0B in write-offs for the global Banking Industry this year alone, the sub-prime meltdown is only the tip of the impending economic troubles to come. :bottle

As previously stated, artificial intelligence computer trading programs/systems drive "investment" strategies in the new global casino. With as little as 5% down, these investment entities control and manipulate large segments of the market. To add insult to injury, the same "collateral" is often used to secure numerous different transactions and positions.

In short, little wonder a "rogue" trader could commit 200% of his Bank's net worth in an "unauthorized" trading position on currency contracts.

Put another way, for a 30 year-old kid to CONTROL a $72.0B position, imagine what a foreign government could do to disrupt major markets, if properly motivated....

FWIW


J.K. :wow

P.S. It puts and places world-wide economic warfare on a whole new level. :bow

[beemerred]

If a "rogue" trader, a motivated foreign gov`t. ( Iran & N. Korea come to mind ), or even some kind of "bogus" company can do that kind of financial damage can a) the art. int. be created to control/predict/prevent that kind of transaction? b) can there be some kind of "clearinghouse" (perhaps in London because of time zone concerns) be created just for these kind of transactions? c) can there be some kind of legislation to stop these kind of financial escapades ( more than just penalities )? JK your comments , please! :lurk

[JK]

If a "rogue" trader, a motivated foreign gov`t. ( Iran & N. Korea come to mind ), or even some kind of "bogus" company can do that kind of financial damage can a) the art. int. be created to control/predict/prevent that kind of transaction? b) can there be some kind of "clearinghouse" (perhaps in London because of time zone concerns) be created just for these kind of transactions? c) can there be some kind of legislation to stop these kind of financial escapades ( more than just penalities )? JK your comments , please! :lurk

Corruption has always been a fact of life.

Hillary and cattle futures is the rule, not the exception. A close childhood friend, who currently manages $6.0B+ in government funds, gets "legal" kickbacks from GMAC for "parking" $2.0B worth of his assests in their vehicles. Although his elected pay check has always been in the middle and upper five figures, my friend is a multimillionare a couple times over from the "influence" he was peddled in his career of public service.

As an Air Force Officer, I stumbled on and attended a four day corporate seminar, conducted by Hi Silver (Space Shuttle Contract/ NA Rockwell), that taught corporate espionage to DOD contractor Senior VPs. It was even advertised in AW&ST. Consequently, the latest public flare-up about Boeing and Air Force, over a new tanker contract, comes as no surprise.

Hell, I've even transported new NSX sport cars on my B-747 Freighter, from NYC to Tokyo, because they're $30K cheaper in the US because of dumping. In Asia, respecting intellectual property and patents is just a joke.

Bottom line, when ex-Presidents shamelessly accept multi-million dollar "speaking fees" from foreign powers, it's not a question of being able to be bought, it's a just a matter of how much.

The answer/solution?

An informed and educated electorate, and an open and honest media and legal system.

In short, we have to fight and win our freedom and independence, each and every generation.


FWIW

J.K. :wow

[sjbmw]

Our banks are now a big Ponzi scheme.
They are powerless to stop the unwinding of the mathematician's revenge. (CDO's, SIV's)

The IMF is selling gold to stop the price from skyrocketing, and prevent a run on the dollar. But they can't stop the commodity markets.

The rabbit hole goes so deep JK, you are only scratching the surface.
Please continue.

What do you know about several hundred classified Executive Orders signed in the past 15 years?

Or maybe the marriage of the Canadian and US Military?

http://www.canada.com/topics/news/story.html?id=403d90d6-7a61-41ac-8cef-902a1d14879d

[From MARS]

Our banks are now a big Ponzi scheme.
They are powerless to stop the unwinding of the mathematician's revenge. (CDO's, SIV's)

The IMF is selling gold to stop the price from skyrocketing, and prevent a run on the dollar. But they can't stop the commodity markets.

The rabbit hole goes so deep JK, you are only scratching the surface.
Please continue.

What do you know about several hundred classified Executive Orders signed in the past 15 years?

Or maybe the marriage of the Canadian and US Military?

http://www.canada.com/topics/news/story.html?id=403d90d6-7a61-41ac-8cef-902a1d14879d

Went to your link. Thanks. I wasn't aware of this information.

Please continue, gentlemen, this is good stuff.

[sjbmw]

This was in the San Francisco Chronicle, an article by a former US Congressman.

http://www.sfgate.com/cgi-bin/article/article?f=/c/a/2008/02/04/ED5OUPQJ7.DTL

This one spins the brain.

[BubbaZanetti]

i'm not sure what interests me less,

high finance
or
hollywood

probably, hollywood, it has less of an influence on politics.:laugh

[JK]

Our banks are now a big Ponzi scheme.
They are powerless to stop the unwinding of the mathematician's revenge. (CDO's, SIV's)

The IMF is selling gold to stop the price from skyrocketing, and prevent a run on the dollar. But they can't stop the commodity markets.

The rabbit hole goes so deep JK, you are only scratching the surface.
Please continue.

What do you know about several hundred classified Executive Orders signed in the past 15 years?

Or maybe the marriage of the Canadian and US Military?

http://www.canada.com/topics/news/story.html?id=403d90d6-7a61-41ac-8cef-902a1d14879d

Hi Herb -

The math and gravity tend to conspire, with it comes to Ponzi schemes and the illusion of wealth and prosperity.

Briefly, there are not enough goods and services being offered and manufactured, WORLDWIDE, to absorb the illusion of wealth that our leveraged computer trading programs are designed to create and collect.

Case in point is the "market value" of Google. Case in point is the real estate sector where home prices have risen double digits, while the underlying economy grows less than 3%, annually. Case in point is the compounded growth and value of pension funds and 401Ks. Case in point WAS Tokyo's real estate and stock market.

And therein lies the seeds of hyper-inflation.

And simply said, those that can afford to finance million dollar homes live free (because of the leverage), while those that can't find most of their discrectional income going toward subsistent rent.

Put another way, the rich get obscenely richer, while the poor get progressively poorer. As a direct consequence, the fabric of society gets stretched and torn.

The social problems begin to manifest themselves in the form of illegal aliens, and the outsourcing of major manufacturing sectors of our economy.

Even more ominious, is the manipulation of commodity prices and currencies. Wild fluxtuations can be artificially created to benefit a chosen few.

In summary, to borrow from the Malthusian dilemma, goods and services grow arithmetically, while preceived wealth is allowed to grow geometrically.

FWIW


J.K. :wow

[JK]

Herb -

Regarding your questions:

What do you know about several hundred classified Executive Orders signed in the past 15 years?

Or maybe the marriage of the Canadian and US Military?

Classified Executive Orders have been shielded from the Freedom of Information Act, so this area of executive power has been successfuly usurped from Congress. In short, I'm clueless.

Regarding our great friends to the North, a good buddy of mine (Mike Gould) was a BG and Operational Commander of NORAD when 9-11 went down, and made numerous media appearances in the days that followed. The Canadians shoulder a large portion of our Air Defense mission, and do a terrific job. Personally, I enjoyed their hospitality and professionalism when I flew Maple Flag exercises and played "crud" at Cold Lake. Same with the guys at Goose, where we did the ALCM and GLCM (cruise missiles, air and ground launched) developmental test and evaluation (DT&E).

Hope that helps.

J.K. :wow

[JK]

FWIW -

Artificial Intelligence allows a computer programs to "learn" about trading patterns, as they monitor the market, and market activities. Important to their operation and function is the ability to access data and information, real time. Also important to their success is the speed of decision making and trade order execution.

Central to this better mouse trap, and essential to its seemless operation, is the assumption of market liquidity and the ready access to collateralized assets. And herein lies the rub, when unforeseen events disrupt the normal smooth flow of market activities.

From natural diasters, to political assassinations, to deliberate acts of sabotage and war, all "bets" are suddenly off.

Clearly, when one trader can leverage 200% of his company's total net worth to secure his trading position, how thinly leveraged are his other co-traders' positions.

With tens to hundreds of BILLIONS being bantered around, who ENFORCES the rules and COLLECTS the "bad" debts, when collateralized trading positions aren't?

Put another way, who's authorized to put "liens" on countries and trading entities when deals go sour and losses can't be covered?

In summary, we are in the midst of World Banks injecting more than $100.0B dollars worth of liquidity, into global markets, just to keep the SYSTEM afloat. And the public and media haven't a clue what the long term ramifications are, as the ongoing economic panic continues to churn, below the surface.


IMHO

J.K. :wow