Competing Messages: "When in danger..."

"... or in doubt, run in circles. Scream and shout."

One of the comments I've heard mentioned often regarding the decline in the stock market is the speed at which it's taking place.

Technology changes how we do things. It doesn't change what we do. It compresses them in time, and expands them in space.

Welcome to the wired world. A little moment of sobriety for all the starry-eyed optimists? Maybe.

Here's some good news:

Assuming things don't get too bad, things should get better just about as quickly.

But that's a very freighted assumption.

Meanwhile, stay on the balls of your feet. Look after your friends and neighbors, and anyone else you can. Breathe. The really important stuff is still all around you. And until this thing sorts itself out, try to think a little bit about this:

Technology does not change the world.

We are not here to change the world.

The world is here that we may learn to change ourselves.

This isn't that complicated. We've just got this ego-centric view of the universe, and until we stop getting it ass-backwards, the universe is going to keep hitting us upside the head with a 2x4. One of these days, we won't get back up.

The universe will go on just fine without us. It'll just try again with a different "us."

Competing Messages: Financial Singularity

One explanation or description I've read of Vernor Vinge's concept of the Singularity is that it will be the point at which the pace of technological advancement or innovation exceeds our ability to make meaningful predictions about it. The important word there being "meaningful."

Our civilization, and the systems that support it, are constructed in the context of "meaning." Which is to say they are, in our minds where we make rational "choices," part of a narrative. Absent the meaning or the context of narrative, we have little way to make rational choices. We don't know what to believe.

Our financial system has reached, likely passed, its own "singularity." The pace of "innovation" in investment vehicles exceeded the system's ability to make meaningful predictions about it.

The reason why the system is breaking down is because most of the players no longer know what to believe anymore.

They don't know what significant portions of their assets are worth. They don't know the extent of their exposure in their liabilities. Yet they are trapped in a system that relies on belief regarding those two features. They have little basis to make rational choices, so, for most of the system, the choice is to do nothing until they know what to believe. Meanwhile, the system grinds to a halt.

The $700B "rescue package" was mostly an effort to establish some basis for belief. The problem with it isn't that the number isn't big enough, the problem is that it doesn't answer all of the questions. "Full faith and credit," is currently a division by zero error. "Undefined."

Some of the more interesting solutions I've read to this problem is for government to declare whole investment vehicles "illegal." Remove them from the belief system, take them off the table, out of the game. Make them disappear. It would definitely reduce the number of current unknowns, but I'm not sure it wouldn't introduce its own set of unknowns.

Whatever the solution ultimately is, it's going to be more philosophical than financial. Sure, much of it's going to be written in financial terms, and even involve large sums of money or other measures of "wealth." But basically, it's going to be a repair of the narrative. A "glitch in the Matrix," if you will. Someone is going to have to tell us what to believe again; what this all means, and how we're going to make choices going forward.

An interesting question is, who is going to author the new narrative? In the last serious financial singularity, Roosevelt started it with the New Deal. Adolf Hitler provided a world class antagonist, and Stalin and Churchill contributed significant plot elements. Hopefully, we'll have a less destructive narrative resolution. Maybe a comedy instead of a drama. Probably hoping for too much. We do love our drama.

As another master of narrative once observed, all the world's a stage and we are merely players, like it or not.