Sunday, April 18, 2010

Kenneth, what is the frequency? The randomwalkers are underestimating the gravity of our situation.

'Let's now examine the more conceptually difficult case of the Tacoma Narrows Bridge. The surprise here is that the wind was steady. If the wind was blowing at constant velocity, why did it shake the bridge back and forth? The answer is a little complicated. Based on film footage and after-the-fact wind tunnel experiments, it appears that two different mechanisms were involved.

The first mechanism was the one responsible for the initial, relatively weak vibrations, and it involved resonance. As the wind moved over the bridge, it began acting like a kite or an airplane wing. It established swirling patterns of air flow around itself, of the kind that you can see in a moving cloud of smoke. As one of these swirls moved off of the bridge, there was an abrupt change in air pressure, which resulted in an up or down force on the bridge. We see something similar when a flag flaps in the wind, except that the flag's surface is usually vertical. This back-and-forth sequence of forces is exactly the kind of periodic driving force that would excite a resonance. The faster the wind, the more quickly the swirls would get across the bridge, and the higher the frequency of the driving force would be. At just the right velocity, the frequency would be the right one to excite the resonance. The wind-tunnel models, however, show that the pattern of vibration of the bridge excited by this mechanism would have been a different one than the one that finally destroyed the bridge.

The bridge was probably destroyed by a different mechanism, in which its vibrations at its own natural frequency of 0.2 Hz set up an alternating pattern of wind gusts in the air immediately around it, which then increased the amplitude of the bridge's vibrations. This vicious cycle fed upon itself, increasing the amplitude of the vibrations until the bridge finally collapsed

Wiki: ' On October 4, 1986, as Dan Rather was walking along Park Avenue in Manhattan to his apartment, he was attacked and punched from behind by a man who demanded to know, "Kenneth, what is the frequency?", while a second assailant also chased and beat him. As the assailant pummeled and kicked Rather, he kept repeating the question over and over again.The incident and Rather's account led some to doubt the veracity of Rather's story, although the doorman and building supervisor who rescued Rather fully confirmed his version of events. '

'Waves are a way in which energy is transferred from place to place without the transfer of matter. The energy is carried from place to place in the form of a disturbance. Waves, which move through matter, are called mechanical waves. They require an elastic material medium through which to pass. Examples of matter waves are water waves at the beach and sound waves moving through the air. Waves, which do not require a material medium, are called electromagnetic waves. Examples of electromagnetic waves are light and radio waves. The wave-like behavior exhibited under certain conditions by particles like electrons are called matter waves.'

'The tides are caused by the gravitational forces on Earth exerted by the moon and sun. These “tidal forces” are not the total gravitational forces exerted by the sun and moon on Earth, but the difference between these gravitational forces over the surface of the planet. It may seem counterintuitive, but the gravitational forces of the moon and sun tug at the oceans primarily on the horizontal tangent and not the vertical plane to the Earth’s surface. This is partly why the high tide lags — also referred to as the lunitidal interval. This tugging produces a tidal “bulge” or area of higher sea level on the ocean’s surface. As Earth rotates eastward on its axis, water moves into this bulge, which produces a flood tide, and eventually a high tide. As Earth continues to rotate, we move into an area of below-normal sea level or nodes, which produce an ebb tide, eventually reaching low tide. The slack tide is when the tide is not coming in or going out. During a full as well as new moon, the sun and moon are aligned, producing strong tidal forces on the Earth. This is also referred to as spring tide, even though it doesn’t have anything to do with the spring season. These are the highest and lowest tides of the month. During the moon’s quarter phases, the gravitational forces of the moon and the sun are perpendicular to each other. Nearly canceling each other’s tidal forces out, the result is smaller high and low tides. This is referred to as neap tide. Earth’s orbit around the sun is really an ellipse, a shape that can be thought of as a “stretched out” circle or an oval. Tides are enhanced when Earth is at perihelion, when the whole planet comes closest to the sun. When we look at the tide tables, you should remember that these are only predicted values utilizing gravitational forces. During El Niño events, actual tides can be up to one foot higher due to thermal expansion of the water column. Storms can also affect sea level. Low atmospheric pressure associated with storms can allow ocean waters to expand, resulting in a temporary increase in sea level. Strong winds can cause additional elevation of sea level due to storm surges. Water is about 800 times denser than air. Waves and tides contain a great deal more potential kinetic energy than the winds for the same area or footprint.'
-John Lindsey

'How much energy do you think it takes to move the oceans? And what do you think it effects when it passes onto land?'
-John Needham (paraphrased)

'Research carried out by William Schulz of the United States Geological Survey in Denver, Colorado, and colleagues, {has concluded} that atmospheric tides are responsible for causing landslides...They discovered that the movements of the rubble were in sync with ‘atmospheric tides’ - daily highs and lows in atmospheric pressure that are excited by changing exposure to the Sun’s rays and by the Moon’s gravitational pull.'
-Nature News

'The two days on either side of the new lunar month represent most of the positive returns on equity markets for the next four weeks.'
- Macquarie Securities

'We find strong empirical support in favor of a geomagnetic–storm effect in stock returns after controlling for market seasonals and other environmental and behavioral factors. Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all US stock market indices. {There is} evidence of substantially higher returns around the world during periods of quiet geomagnetic activity.'
-Federal Reserve Bank of Atlanta

'The year ahead appears to us to contain the most powerful planetary alignments in centuries, not just decades.At the recent NCGR conference in Cambridge, Mass., an astrologer said they checked back for sky patterns a thousand years and another piped up that they had looked back Ten Thousand years and neither had seen this one’s match! It would be considered a ‘done deal’ or a high probability that World Markets will Crash again during 2010. We will do everything but guarantee you that stocks will crash worldwide within three months of August first (that is between May 1 and November 1.'
-Arch Crawford

Well the Goldie imbroglio looks interesting, an institutional he-said she-said with ACA, but it would seem to this humble blogger that the folks not on trial are the ones that created the environment where the yield pigs were voraciously sniffing any and all troughs, namely the Federal Reserve and their low interest rate, Nancy Capitalist enablin', 'everything must go' free-market fire sale.

But examining causes and actions and connecting dots to consequences is just too complex. 'Tis much easier to obviate the Casus Foederis for a Casus Belli, allowing our blessed leaders to initiate metaphorical perp walks and enabling the pablum narrative solvent of cleansing and the, of course, obligatory turning of the page ....

One upside is that this does weaken the efficient market theory, that is, solons able to efficiently rig most any market to their benefit. Not that efficient market theory and its sauntering corollary random-walk needed much debunking, a trip to that antiquated warehouse, the library, or its' 21st century equivalent, Senor Google, offer ample empirical evidence that such foolish notions belong in the dustbin , not the acknowledged tome, of history.

What were the odds that the SEC would charge Goldie, not work out an 'agreement' a priori, and goodness me not at least give a courtesy call so Goldie could short themselves? Considerable no doubt.

But no more considerable than the odds of a Gaussian distribution explaining market movements. Of bubbles in your soda diagnosing bubbles in your portfolio. Of dice playing describing the nature of the dice itself much less the gamblers with same.

The progenitors of alternate theories have been largely ignored; the adherents to the ex-theory randomly maintaining that paradigms cannot be abandoned no matter how shaky, unsatisfactory models cannot be discontinued no matter how broken.

The logical progression of thought that adhering to a broken thesis in part precludes one from considering alternative schemas is a self-reinforcing loop of delusion.

But it did not have to be so...

There was a brief moment, of a few months, half a century ago, where an economic Einstein named Benoit Mandelbrot proved that discontinous market movements, allowable under random-walk to the probabilistic tune of a gazillion-squared, can be scientifically explained ... albeit in non-Gaussian terms.

This breakthrough however proved not only market movements but also that it was too difficult for folks to accept that which leaned into the wind of their strongly held self-perceptions.

So the fractal basis of market movements was relegated to an interesting thesis and its' proponents forced into the corner of proving a negative, rather than affirming a negative.

The debate continues today, folks that search for the underlying fractal pattern being asked if they are going to 'hang it up' if the market doesn't do this or that....

Never though will the naysayers put their theories under the empirical microscope to consider the odds, to fathom the impossibility, of random walk theory within the context of market movements of the last century or even the last few decades.

Consider, gentle reader, the premise from a different direction. If the markets are the data-set of humanity, if the markets are in effect expressing the nature of man, then does it not seem reasonable that the natural law, oft-repeated by traders of old, in fact both guides the nature of man and markets?

Is it snips and snails, and puppy dogs tails or for the gentler side, sugar and spice and all things nice?

As likely a random collection as anything else...

No, we, that is you and I, are made up of energy, energy that is described by its wave-particle duality. We vibrate and as such have a frequency, a wavelength, a harmonic, an energy signature...Seriously, you can look it up!

Now undoubtedly there is randomness on a micro scale, you are for example choosing to read this, but on a macro scale there are cycles, interactions if you will, between other waves, harmonics, energy sigs etc...

In fact I might, controversially , advance that you are reading this entry because mayhaps we both vibrate in a similar fashion!

That is where the substance of the Macquarie Securities quote and the Federal Reserve Bank of Atlanta quote at the top of this post find its' origins...

That is why fellas like Arch Crawford have such an amazing record in sleuthing out turning points, almost always nailing the inflection, and usually nailing the direction.

The wave-particle duality inherent within the natural law has a fractal basis. This is expressed for linear systems, as but one example, by the superposition principle, the net response at a given place and time caused by two or more stimuli is the sum of the responses which would have been caused by each stimulus individually. It is further expressed, by Mandelbrot's assertion, that fractals are objects or quantities that display self-similarity on all scales. It is confusingly expressed in truly gobbledygook form with convoluted sentences like, 'The complex spaciotemporal patterns of atmospheric flows that result from the cooperative existence of fluctuations ranging in size from millimetres to thousands of kilometres are found to exhibit long-range spacial and temporal correlations. These correlations are manifested as the self-similar fractal geometry of the global cloud cover pattern and the inverse power-law form for the atmospheric eddy energy spectrum'.

Clearly the last fella is too advanced for our language.

What is not however too terribly advanced is that Mandelbrot discovered that power laws, a relationship between two quantities where the number or frequency of an object or event varies as a power of some attribute of that object, squares the broken circle of random-walk theory. It explains the heretofore unexplainable market movements of recent vintage. He was able to show that discontinuous market movements exhibited scalability, i.e., fractal behavior, when plotted on engineering graph paper - the kind with logarithmic scales in both directions. This was prima facie evidence of a power law behavior within markets. Power law merely describes the nature of a logarithm. The logarithm of a number to a given base {base 10 describes of course what most of us are familiar with)is the power or exponent to which the base must be raised in order to produce the number.

Power laws exist in nature, for example, gravity weakens by the inverse power of two with distance. Power laws describe the distribution of income in the upper reaches of society. Power laws also apply to the price movements of many financial instruments. Power law distributions allow for many more price swings than would the bell curve and this 'new paradigm' fits the data for many price series.

Power laws relate planetary structures to harmonic constructs ... in Kepler's harmonic mode of thought, the temporal primal intervals of the orbital periods must be raised to the second intervallic power, and the spatial primal intervals of the major axes must be raised to the third intervallic power. This means a power ratio of 2 : 3, i.e. the fifth, the most important interval after the octave.

As further advanced by Hartmut Warm, the order and movement of the planets in our solar system corresponds very accurately to simple geometrical figures and musical intervals, although in a different way than assumed in conventional concepts. One of the keys for an explanation is to be found in the analysis of the harmonical arrangement in the semiminor axes of the elliptical orbits, whereas earlier models and calculations were based on the semimajor axes. He concludes that, thus the ancient notion of a “harmony of the spheres” and especially the fundamental ideas of Johannes Kepler have been confirmed for the first time, and this in a manner that can principally be verified by everyone.

These harmonical arrangements are fractals of the Danielcode ratios, advanced by John Needham, who has an empirically exact method to trade the fractals discussed by Mandelbrot and that are the basis of natural law.

For your humble blogger, this preponderance of evidence, especially, in the canucklehead vernacular of Bubblevision, the 'actionable' dimension of John Needham's DanielCode, lends disturbing credence to Archie Crawford's prognostications and the potential Tacoma Bridge run-on effects of the waves coming to a planet near you.

Earthquakes, volcanoes and ? Oh my!

Clearly, the randomwalkers are underestimating the gravity of our situation.

Kenneth, what is the frequency?

Or more soberly,

Kenny? OMG!

Got fractals?


Mark said...

If only we knew when.Those Index options are a bit sensitive about timing,Could we please run this past your advanced ex-in law?I bet he can pin down the top day for us.If he nails it,cheese whoppers are on me next time I'm in his hood.Mark.

Anonymous Monetarist said...

My advanced ex-in law now only has a P.O. Box for mail and doesn't even have a phone number where my 18 year old nephew and his mom can reach him...

What a bum.

Anonymous said...

Having read that,and knowing well how that probably makes your nephew feel sometimes,I wish I had not made light of the subject.I am sorry,AM.One of the nicest things about being a dad is making sure my own kids will never know the sting of cruelty or neglect.That ex-in law and St.Peter will have some things to talk about,someday.Mark.

Anonymous Monetarist said...

No worries.

Agree whole-heartedly.