Archive for November, 2011
Barbarian Financiers

Interesting youtube clip on the US housing market. It provides evidence and reasoning as to why things will get a lot worse.

The video also makes a comment at 10.14 about the problems resulting from barbarians taking over. This reminded me of this fascinating post on the return of the barbarian at Ribbonfarm. The post covers so much about our world. Once it is fully incorporated into the framework through which we see the world, many things may look quite different.

I can’t do justice to the post by extracting aspects of it. It really is one to read in its entirety and is quite short. Nevertheless here are a few extracts:

As you settle down and accumulate stuff, the risks of existence gradually decrease and the surpluses available for hedonism increase. The net effect of both is that less actual thinking, but more work, is required to exist.

To peek ahead a bit, settled civilization is a fundamentally Gollumizing force. It makes you comfortable, stupid and addicted to the security and accumulated fruits of your labor.

The pattern is a simple one: a settled civilization grows old, stupid and tired, and a vigorous barbarian culture swoops in and takes over from the top, and gradually gets civilized and stupid in turn, until it too is ripe for destruction by pastoral nomads on its periphery.

“barbarians” are on average, individually smarter, but collectively stupider than a thriving settled civilization.

One-on-one, a lower barbarian can outthink, outfight, and out-innovate a civilized citizen any day.

But a settled civilization at its peak can blow a lower barbarian civilization away. Not least because at the very top, you still have Veblen’s “uncivilized” higher barbarians (or, to use the Ribbonfarm term, sociopaths). But once it begins its decline, the greater live intelligence of the barbarians begins to take effect.

The explanation for this contradiction is a very simple one: by definition, civilization is the process of taking intelligence out of human minds and putting it into institutions. And by “institution” I mean something completely general: any codified organizational form based on writing will do.

The post is the first time I have thought through the negative consequences of the trend to outsource cognitive functioning to gadgets such as smart phones. Also I’d previously seen our civilisation as enhancing our intelligence in an individual sense. Now I am not so sure. It certainly enables greater productivity and the ability to access more knowledge. But what true effect is it having on us? Perhaps there is something to this after all?

There is much here that warrants a full post. Perhaps once I have finished Veblen’s Theory of the Leisure Class, Tempo and Snakes in Suits. I will return to the topic.

At this stage all one can say is that barbarians have always shaped the world. They are simply writing a new chapter with their activities in the financial markets.

Spherical Flying Machine

This video of Spherical Flying Machines taking off vertically, flying fast horizontally and simply rolling along the ground would be mind blowing a decade ago. It still is very impressive, especially given it is built using around US$1,400 worth of parts. Scroll down the comments to the link for clips of Verticopters and Flightships. Role on the 3D printing of such flying machines for a song. Then make them more powerful and larger as well as a whole lot smaller. Add in autonomous algorithms and you have something that makes Predators look like a blunderbuss.

I suspect US aircraft carriers will make juicy targets should they come up against a technologically advanced opponent. Their fate might mimic that of battle ships, masters in one world war only to find themselves highly vulnerable in the next. Whatever transpires vis-a-vis aircraft carriers, the next world war sure is going to be different, even if it lasts more than a few seconds. Miniaturization and growth of computing power could combine to make deadly swarms intent on eradicating human life. Visions of Skynet come to mind. The exponential technological growth curve clearly holds peril as well as promise.

The educational bubble may have burst, but there could be scope for more schools such as this – plenty of peril to go with the promise. I’d suggest taking out life insurance and income protection prior to enrolling.


  • French exposure in pictures. An FT Alphaville post showing why European sovereign defaults my come in clusters. It’s an interconnected world out there and this in part explains why French spreads at 21-year high.
  • Rising prices cutesy of increasing Chinese wages. Increasing wages in the workshop of the world could feed through to increased prices in the developed world. Together with any decrease in the value of Western currencies, this could signal the next stage in the global reset. A world in which the currently developed countries do not enjoy living standards vastly in excess of all others. Essentially real wage differentials revert to the mean, one in which citizens of civilised countries earn similar sums. The speed of change in Shanghai show how fast this can occur.
  • Brilliant graphic showing the odds of your existence. I am sure this shows up something fundamental about reality. As perhaps does the Ponzo illusion in its demonstration of how our mental heuristics can lead us astray. Our cognitive failings probably explains why so much of our world today is built on ponzi schemes, in Hyman Minsky‘s Financial Instability sense of the word.
  • I suspect Bank of America rakes in big debit-card fees from people withdrawing unemployment benefits is another government contracting fail. The beauty of capitalism is that it enables man’s inherent nature, including greed and the lust for power, to work for the good of all.  Government monopoly granting undermines this.