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Fwd: [0811.4678] Mathematics underlying the 2008 financial crisis, and a possible remedy

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  • JACK SARFATTI
    Thanks Nick
    Message 1 of 4 , Dec 1, 2008
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      Thanks Nick

      Begin forwarded message:

      From: nick herbert <quanta@...>
      Date: December 1, 2008 4:29:11 PM PST
      To: Saul-Paul Sirag <sirag@...>, Jack Sarfatti <sarfatti@...>, Richard baird <yuzhou@...>, George Weissman <georgeweis@...>
      Subject: [0811.4678] Mathematics underlying the 2008 financial crisis, and a possible remedy

      Global Financial Meltdown: Human Folly or Macroscopic Quantum Effect?

      http://xxx.lanl.gov/abs/0811.4678

      Among the diverse factors contributing to the current financial and economical crisis, there is a purely mathematical law not mentioned by economists. The indistinguishability of identical notes results in a condensation phenomenon (also known in a completely different situation in physics as Bose condensation): if the total amount of money in circulation exceeds a certain threshold (depending on various economic factors), then a collapse occurs. One possible remedy is to introduce several currencies to be used simultaneously; we show that this raises the threshold and thus might help at least to postpone the crisis. If each of the United States were to use its own unique currency along with the dollar, the threshold would be up to seven times higher, and the crisis may not have happened yet. The former abandonment of national currencies in euro countries in favor of one unique European money could also be viewed as an unfavorable factor in the development of the crisis.

    • JACK SARFATTI
      Is this a hoax?
      Message 2 of 4 , Dec 1, 2008
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        Is this a hoax?
        On Dec 1, 2008, at 6:08 PM, JACK SARFATTI wrote:

        Thanks Nick

        Begin forwarded message:

        From: nick herbert <quanta@...>
        Date: December 1, 2008 4:29:11 PM PST
        To: Saul-Paul Sirag <sirag@...>, Jack Sarfatti <sarfatti@...>, Richard baird <yuzhou@...>, George Weissman <georgeweis@...>
        Subject: [0811.4678] Mathematics underlying the 2008 financial crisis, and a possible remedy

        Global Financial Meltdown: Human Folly or Macroscopic Quantum Effect?

        http://xxx.lanl.gov/abs/0811.4678

        Among the diverse factors contributing to the current financial and economical crisis, there is a purely mathematical law not mentioned by economists. The indistinguishability of identical notes results in a condensation phenomenon (also known in a completely different situation in physics as Bose condensation): if the total amount of money in circulation exceeds a certain threshold (depending on various economic factors), then a collapse occurs. One possible remedy is to introduce several currencies to be used simultaneously; we show that this raises the threshold and thus might help at least to postpone the crisis. If each of the United States were to use its own unique currency along with the dollar, the threshold would be up to seven times higher, and the crisis may not have happened yet. The former abandonment of national currencies in euro countries in favor of one unique European money could also be viewed as an unfavorable factor in the development of the crisis.


      • JACK SARFATTI
        Thanks for the update. A much clearer view of the 2008 financial crisis is here http://www.fourmilab.ch/fourmilog/archives/2008-12/001089.html ... Thanks for
        Message 3 of 4 , Dec 2, 2008
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          Thanks for the update.

          A much clearer view of the 2008 financial crisis is here

             http://www.fourmilab.ch/fourmilog/archives/2008-12/001089.html

          On Dec 2, 2008, at 12:57 PM, Brian Josephson wrote:

          --On 2 December 2008 10:19:34 -0800 JACK SARFATTI <sarfatti@...> wrote:

          :-)


          On Dec 2, 2008, at 10:12 AM, Jeremy Asher wrote:


          It didn’t seem to condense, rather to evaporate...


          Here's comment by our tame TCM-group Russian David K ... of whom I solicited his views.  Maslow has not as yet responded to my enquiry as to whether this paper was a hoax or not:

          Dear Brian,
          They are not physicists. V.P.Maslov is a pretty famous mathematician,
          inventor of "Maslov index" \gamma - the factor in Bohr-Sommerfeld
          quantisation rule 2\pi \hbar (n + \gamma) in multidimensional  WKB. The
          same man is son in law of late Vietnamese leader Ho Shi Ming.
          Accidentally, I met ones V.P. Maslov and had a chance to learn about  his
          excessive self-confidence. So, it is not surprising for me that he is
          ready to give advice to bankers.    My personal experience is that a
          real understanding is achieved with so large efforts, that it is only
          natural to understand something in  one field and nothing in all the
          others.    Thank you for bringing this to my attention.
          David


          --

          * * * * * * *    Prof. Brian D. Josephson :::::::: bdj10@...
          * Mind-Matter * Cavendish Lab., JJ Thomson Ave, Cambridge CB3 0HE, U.K.
          * Unification *   voice: +44(0)1223 337260 fax: +44(0)1223 337356
          *   Project   *       WWW: http://www.tcm.phy.cam.ac.uk/~bdj10
          * * * * * * *

        • Jack Sarfatti
          Sent from my iPhone Begin forwarded message: From: Paul Zielinski Date: December 3, 2008 8:23:04 AM PST To: Brian Josephson
          Message 4 of 4 , Dec 3, 2008
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            Sent from my iPhone

            Begin forwarded message:

            From: Paul Zielinski <iksnileiz@...>
            Date: December 3, 2008 8:23:04 AM PST
            To: Brian Josephson <bdj10@...>
            Cc:
            Subject: Re: [0811.4678] Mathematics underlying the 2008 financial crisis, and a possible remedy

            Yes, I have no doubt that the combinatorics in the paper are mathematically impeccable.

            Regardless, like you I'd still bet money that the rest is irrelevant nonsense.

            Brian Josephson wrote:
            --On Tuesday, December 2, 2008 21:36 -0800 Paul Zielinski <iksnileiz@...> wrote:

            In any case, the premise is false: bank notes in circulation are not
            indistinguishable!

            Just possibly the complicated maths in the paper itself might justify the argument despite that but I'd be very surprised, and almost prepared to bet 2 dollar notes on it, distinguishable or otherwise!  If there were a valid argument, it would depend on the fact that you don't have to go via a money changer to use one currency to buy something priced in another.  If currency exchange were totally barred that obviously would have an influence on trade etc., but in the real world that is an unphysical assumption.

            Which reminds me that recently one of our research fellows gave a talk on his work on the relevance of martingdales to the stock market.  He admitted to me afterwards that he was more interested in the elegant maths than to its applicability to the real world!

            Brian

            * * * * * * *     Prof. Brian D. Josephson :::::::: bdj10@...
            * Mind-Matter * Cavendish Lab., J J Thomson Ave, Cambridge CB3 0HE, U.K.
            * Unification *    voice: +44(0)1223 337260 fax: +44(0)1223 337356
            *   Project   *        WWW: http://www.tcm.phy.cam.ac.uk/~bdj10
            * * * * * * *


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