Replaying 1929?  From columns around: July 7-15, 2001

 Model Prediction:    Will the Markets Now Move?

It will be several hours before the after-hours markets open, but when they do, we will see over the following 2-months, whether a highly sophisticated computer model accurately forecast events to come in the financial markets. If you haven't been reading this site on a daily basis, on Wednesday I posted an update forecasting a "tipping point" event this weekend.  That work was later upgraded to a major market warning by week's end.  On Saturday, I posted that there was a good chance the Star Wars missile test would be the "tipping point".

Before we get into a detailed discussion of the events of this weekend, let me first show you how "tipping point" theory works in complex systems theory.

A "tipping point" occurs when events from the future pass some mathematical point, where the general direction of many future events changes based on the events in the past that lead up to it.

OK, now that you see how the basic mechanism works, the next step in understanding how the much larger model works is to picture what happens when you put lots of these event models into a huge array updated daily over many months.  I like to picture it this way:  Take a building, tip it over, and as the frequency of points in a "scatter chart" begins to thicken, you get the emergence of something called "entities".  An entity might look something like this:

Before (and as) the bluish entity appears, along the dark area, events thicken up, congealing into the entity. 

And, after the event (such as the one projected for this weekend), the entity may either continue to grow, or, as events from other sectors of life unfold, the entity disperses over time. 

The way the model "ends" will depend on the type of event.  Sometimes, the end point (right side of the entity) just sort of dissolves.  Other times, the entity continues growing.

What made the entity that the think tank was tracking so interested was that it showed a major tipping point event this weekend, and among the thousands of data points, the model was showing specific highlighted areas of the world, and certain aspects.

Now that we are past the tipping point, it appears that the output from the model may, and I emphasize the word may, have been pointing toward the Star Wars missile test that occurred (unknown to me when the model was posted Wednesday) precisely within the time specified.

Now that the Star Wars project has scored a direct hit, the question is "If this was the tipping point event, how does it change the future in such a way that it will cause a massive change in the markets?"  That my friend is precisely the right question to be asking.  Let's consider, in a schematic kind of way, what the success of the missile test might mean, over the next two or three years.

If the missile test really is the tipping point, that means we can fill in a box as being "missile test successful".  And in the drawing, I have colored this box yellow.  With me?

OK, concurrently, the worldwide arms race equilibrium is relatively stable.  The caveat here is that it "appears" to be stable.  There may be a lot of destabilizing things going on that are below the public's perception threshold, but it seems fairly stable.

Now that the missile test is gone, and the "shot to kill" technology may be working, that will almost certainly lead to the U.S. unilaterally abrogating the ABM treaty.   (sorry about the spelling error!)

This in turn causes global uncertainty to develop over the coming months. 

And this, in turn potentially puts the world into a very high risk arena.  We might see, for example, the People's Republic of China launch a move against Taiwan in the near future, because the longer they wait, the less deterrence their long range missiles will have.  If the U.S. becomes an unbreachable fortress from a strategic weapons standpoint, then any potential aggressor now has a major incentive to move sooner, rather than later. Why wait for the U.S. to get "stronger"?

Of course, once the systems are deployed, if the development gets that far, then the risk mode reverses:  The U.S. gains a worldwide strategic one-up.  Unfortunately, the success of the test has not passed un-noticed to major players like Russia and China.  It is sure to bring consequences in terms of how global development takes place.  The tipping point theory doesn't predict the specific outputs or pinpoint individual events, but again, getting back to the model, it is forecasting an all-time low of the Dow around 463 on November 8th, 2002.

Whether the world gets past the "risk zone" unscathed becomes the nexus of just one aspect of tipping point problems.  Could there also be another tipping point, less obvious than the missile test success?  Sure.  But does the reigniting of a worldwide arms race have the potential to change markets?  Of course. Howard Hill checked in and reported that although the players seem locked, at least Friday, the spreads surrounding South America's mess (Argentina et al) do not appear to warn of an impending breakdown there.  This would have been another tipping point possibility.

The Feedback Problem

In the course of writing about the model during the past week, an interesting thought kept coming to mid:  If a couple of guys in a think tank came up with something that has the potential to be accurate, why hasn't the government built a huge model of an even grander scale that this small (22 servers is small compared with the government's horsepower), why doesn't the government put up a massive public model so that we can all modify our behaviors on a day to day basis and do a better job of "co-creating our own futures" [after Everest's many worlds interpretation of quantum mechanics]?

The answer it turns out, is that there may be such a model, but we can never learn about it.  As the think tank found out, as soon as we put the information about the model up on Urban Survival, the model shortly after began to lock up.  Here's their email advisory:

We have discovered something very interesting. Your site has
started to pollute more than 8 of the input streams since this
morning. So the model is collapsing under its own regression
algorithm for time.

When we run the model formulas, they now spin down on an
iterative spiral in on themselves. It is because we are finding text
from your warning appearing in the input streams coming back from
the robots so they follow the chains and come back to themselves
so to speak. Also the links are passed to the next layer which
does the processing and all the values are spiraling up as the
iterative examination for weighting starts finding, in essence, its
own dictionary. 

Looks like the model is collapsing. I can't get the formulas past
some of the initial analysis. I run out of processing power even with
multiple CPU computers.

Well, we know not to do that again.

FYI.
On the last run prior to break down, the tech bot brought back
some interesting info that MSFT is starting to spin desperately, the
'activation' required aspect of the new windows xp and office xp.
That they are doing it prior to launch shows that their test groups
are showing resistance to use will be very high and that they are
running into the rising wave of public reeling under the privacy
impacts. So long term your bets are on with that firm.    [Ed. Note: George shorted msft 60's this cycle on Thursday]

Also, freak (very rare) wind storms NOT hurricane related crossing
FL east to west. 70+ mph.
Also rupture of nat gas lines in Blaine Washington. Not clear yet
whether lines were involved in any sort of explainable construction
accident.

As to any new info out of this model I doubt it. I have to wholly
recreate it, as well as redo all the bots to scrub for ourselves.
And now the further complication that our servers are going poof
when the ISP goes under in about 10 days.

So all the scripts are shot anyway as they grew up with referential
specifics to my ip address, but now our contamination of our own
data streams actually validates the lattice algorithm that we use for
our propagation formula so that at least is good.

Well, we should know more by Monday.

As they used to say in the cowboy movies, "Well, if that don't beat all!"  Apparently, when some of the posters to the Prudent Bear boards started referencing this site, the model got into a complex set theory equivalent of a circular reference.

With the model locked up, and with about 1-man year of labor required to restart the model, the think tank isn't planning to restart the big one any time soon.  They are interested in doing it for a large financial organization, but figure it would be a $2-million dollar project and even at that, the information put out by the model would need to be very tightly contained in order not to "pollute" the running model inputs

Will we realize in retrospect that the Arms Race restarted this weekend?  Does that wreck the recovery that everyone is wishing for?  Who knows!

So there we have it:  A Model, a Posting, a potential Tipping Point Event, a Model Lock Up, and now we're back full circle: To the original work that got all of this sidebar going: the notion that we're replaying 1929-1937.

That said, despite the run up in the numbers last week, it shows that we're still in the "glide slope" toward replaying 1929-34, but with the model's forecast out there (but now frozen due to the lock up event), the really interesting part now becomes the question "Where will we be by October 1st?" and the other question:  "Did a new Arms Race just Start?"

(Charts of the week deleted because they are outdated, capisch?)

The following section includes the postings leading up to the "Tipping Point" this weekend

               Missile Test  to Fail?               

This is the last update before we get to the timeframe predicted by the highly advanced computer model (discussed in detail below) that is predicting a major complex-systems theory "tipping-point" will occur tonight, West coast time.  As was reported earlier this week, something - and we have no way of knowing precisely what - has a high probability of happening between about sundown tonight and 5 AM Sunday morning.  This "thing" is expected by the model to impact markets beginning Monday and the impact could be significant.  The model indicates that the tipping point event will involve three geographic areas, as shown by the black splotches on the map below:

The model does not tell us how all of this works out.  It only assigns probabilities.  However, the one thing to add to the work posted earlier this week that is coming to the surface just today, is that the military is planning a major Star Wars missile test in the appropriate timeframe.  The test will be launched from Vandenberg AFB and the interceptor missile will be launches from the Marshall Islands, which is within the Southeast Asia "blob" on the map. While the test if going on, the space shuttle will be on station over South America, which seems like little more than coincidental timing.  But, who knows?

I asked the think tank people this morning, what kind of odds they give to something going horribly awry with the missile test tonight, and they place the odds, basing their comments solely on the model, at about 5 chances out of 13 that the "tipping point" would involve the test.  Put another way, they would put a $1 dollar best on this event as a "best fit" and about $0.50 on the runner up, Argentina's looming default.  Odds they figure on a meteor impact out of the blue is so far down as to be almost in the noise level.

What makes this missile test even more interesting as a potential to "fit"  is that there has been an overnight rash in the number of reported anomalous radio signals that are involved with the governments HAARP project, and the tank folks noted that the space shuttle is "working over the South America zone. The "cosmos" attribute is high in the model for example For an overview of the HAARP project, please click over to: http://www.haarp.net/haarpoverview.htm  If you are a ham (like me) you may wish to start listening tonight for high power signals in the 3.3-3.7 Mhz range.

This type of modeling is very complex.  You've got data points by the hundreds and then attributes and aspects of each data point.  You've got loci and foci, to boot.  Loci is the location orientation, and foci are the focal points of an event.  This is where the modeling gets really complex.  A potential event may have a loci of South Asia (as the Marshall Islands launch center) but the foci, or focal point of the local action could be the U.S., becvause that's generally where the interceptor missile might be aimed.  The probabilities look something like this when you assign them to quadrants:

Event visible/doesn't fit model   |     Event visible, fits model

--------------------------------|---------------------------  (perception threshold)

Event not visible/no fit               |   Event fits, but won't be visible till later

         <-----------------no fit    |   fits prediction parameters ---->

A lot of the radio traffic coming from the shuttle has been highly edited on this mission and there was a reported "toxic battery" spill on the craft earlier this week.  Odd event, considering batteries on the spacecraft are sealed.   The question is whether what shapes up a major test of the missile defense system will go horribly wrong, thus score a direct hit for the quantum/complex theory model, or whether there will be some "out of the blue" event tonight. 

The notion that something will go wrong with the test tonight is purely conjecture as an event that would fit the model.  Tonight's test may be in some new power range of "ionosphere heating" that has not been tried previously. It has a higher probability of occurring than an out of the blue event like a large meteor impact.  It could conceivably be tied in to a number of anomalous events that have been reported worldwide, including oddities like the "chem trails" that have been reported all over the US, and even that weird EMP-like event in Tennessee a week ago (see link below).

Whether the test causes a major problem, like an EMP effect that could knock out power lines and computers in the impact zone, or whether China, which has a HAARP-like project of their own uses tonight's test to really wreak havoc, we may never know.  That's because if the missile test is a failure, then the military would likely gloss over it.  On the other hand, if something did go horribly wrong, and to the extent that it was picked up by national media (like say HAARP burning a big hole in the ionosphere due to an accident, or the missile going off course and landing in Denver) the event would come up from below the perception threshold and it will be on CNN tomorrow.

So with all that as background, let's see what happens tonight.  Again the odds are still better than 50% that the event will be below the perception level, but if there's something on CNN by the end of say next week, that meets the model outputs, then the guys in the think tank will have scored a major hit, and that would have a long term impact on how we trade markets.

Lot's of possibilities are covered by the model, so don't write down the missile test as "bound to fail".  We may see something 2-months from now that would look back to this weekend as a tipping point.  Let me give you a for instance.

Let's say that at midnight tonight a major mid-West ISP closes down.  This takes a certain number of Internet nodes down.  This turns out later to be the "straw that breaks the camel's back" because with the increasing number of servers coming down, the web is getting slower.  Maybe something like that is the tipping point.  I note that when Webvan closed this week, they took down something like 250 servers, and that has noticeably decreased web performance in the markets where the servers were located.  Will defaulting ISP's and web dotcoms bring down the web?  An interesting notion in itself.  With another one of the "tank's" models showing that only about 135 Telco's will survive and be around 2-years from now (from the present 1300 or so), that could also be the kind of tipping point event that will start showing up in the markets next week.  That type event though would be well under the perception threshold until way after the fact: That could also be what the model is signaling.

Still, with a big missile test tonight, and with all the RF expected to be floating about, it could be that the model is predicting something like a missile test failure that could be of such a magnitude that we will all see it on CNN tomorrow. 

If the model does happen to get it smack bang right, there are tremendous implications for trading, because the model has the potential to vastly change the landscape of time-dependent investing; things like options and derivatives.

I personally expect when we wake up on Sunday that we will see the same world that we're seeing today.  HOWEVER, if there is something really big and really anomalous, you - and I - won't be horribly surprised. 

Of course there are all kinds of other things that could "fit" as a tipping event.  Example?  I've had credible reports that US intelligence types are already in Egypt to stand by in the event of something "big" this weekend.  Is this the weekend the middle east blows up?  We'll know soon enough.  Meantime, you can read the earlier work below and draw your own conclusions.

Skeptical though I am, if the market tanks early next week, I won't  say "I told you so..." 

The odds of this being a "miss" are 99%.   Remember that no matter how good the algorithms, 22 servers data-mining and calculating are an unlikely and puny match for something as complicated as the future. But, gee it's good fun to try.

Urgent Wednesday night Update:

Beyond the MUC?:  A Quantum Warning About July 15

Suppose that I told you that I had received a detailed report from a think-tank somewhere, warning that something big - on possibly a global scale, had the potential to happen this weekend, either late on the 14th or on the 15th of July.  Nuts?  Well, I guess we'll see.  Let me bring you up to speed a bit.  First, unless you've been living under a rock somewhere, you know that there is a lot to this "quantum mechanics" stuff and there is some mode of transmission of future events that takes place before an event.  (See the article from the Boundary Institute referenced below).

Under strict conditions of confidentiality, and no, I can't tell anyone who the authors are, but let's just say that there are people looking at thousands of datapoints on the web, putting it all into some very smart software, and looking at graphs that would fill the wall of a livingroom.  What these people are looking at are time dimensioned large scale charts, that have a similar structure to the Mazurok-Ure Correlation graphic presentations, but which look at news events, and try to calculate the potential for particular events on a particular day ... in the future.. 

Sound fascinating?  Well, I can't tell you anything else.  But here's the paper that outlines the general work.  From a longwave economics standpoint, its interesting because it says the current downswing in the market will continue for another year and a half, and that once there, we flat line for 7-years or longer with the Dow somewhere south of 1,000 and a likely value of 468 in the model.  Intriguing?  Pull up a cup and read on about the latest happenings in quantum physics meets the Mr. Markets... Before we begin, you need to know a quantum physics term: Fundament = that lowest possible common level that is being sought through quantum physics.  So if it is turtles all the way down, this is the turtle that all others stand on.

Screwy Theory #153

What matters is perception. I really hate to say that. I mean, I really hate to say that because I operate on the theory it is substance more than instance that is the key to life. However, my work of the last few years with complex systems and diffusing set theory are gradually beating it into my old bald  head, that what matters is perception, not substance of the event. At least to such things as markets.

An instance, by the by,  is the manifestation of perception. That is, I perceive the giant white rhinoceros charging down the road toward my old Chevy pickup, but the rest of the day, as I tell and retell the astounding story to any who will listen, it is the instance of the rhino which my brain provides me as a model for my narration. When I describe the beast as being as tall as the hood of my truck, I am mentally measuring not against the perception of the rhino, which lasts only  a millisecond, but against the instance of that encounter which I carry around in my brain in a sort of graphic image format called a ‘grapheme’.

Make sense?

Ok, so it gets a bit tricky from here. And by the way, I am attempting to describe some work and methods which have allowed me to make a total ass of myself by way of a prediction that I made. Rather, the work predicts, I was merely foolish enough to pass it along to Mssr. Ure. 

My disclaimer here is that all this work at this time is not codified, not reviewed by peers (other old bald guys?), not to be considered ANY kind of advice to do anything (especially anything that might get me sued), is totally an effort to prove out a few theories, and is based on what some may consider to be less than solid science. Ok? Basically I am saying that on your bullshit meter, place this fairly high up there.

Now, that having been said, this work has proved itself monetarily for me, and has been valuable in areas economic and social in terms of showing developing trends. I have made/saved some money using the trends that are shown with the work in the past year and a half.

So, that said, I probably should give you an idea of what and how I put this together. First, I have a partner who has yet to adopt my motto, ‘Of course I am crazy, but that does not make me inaccurate’ and so shall remain nameless, as we are likely to totally miss our projection and be humiliated by worldwide readers. So the workload is divided a bit by number of hands.

A brief explanation of the start and present state of this particularly Screwy Theory follows. We start with the premise that all things in the known universe including you are composed of atoms and molecules. These atoms form a self-organizing system of systems until more complex forms are generated such as planets, plants, humans, and cantaloupes. These complex systems of systems are all composed of atoms that are basically little differentiated from one another. These complex systems are all inter-related in that we all arise from the same source material. All our source material, atoms and such, is composed of the little and even littler critters being discovered by quantum physics. So basically, through the media being discovered through quantum view of the universe, all things are related to all other things.

From here we start with theory derivation based on some observable subsets of the whole universe. Take the oceans for instance, or any body of water. Within the complex system of the ocean, while all molecules are water, and are just like sitting there, hanging out with the other water, there are levels at which the ocean, acts as though it is a discrete system, which can be felt (waves), observed (up and down motion on a boat), seen, heard, et cetera. But, get this, there is no ‘thing’ as an ocean, merely bazillions of discrete, separate water molecules. AND the marvelous thing about this particular system, the ocean, is that when waves flow through it, the individual molecules of water do not travel with the wave. The wave is independent phenomena separate from the water, yet entirely (in this case) composed of water. And, as far as we know, the water molecules are totally oblivious to the wave phenomena. While things like the tides will cause water molecules to move vast distances, the more powerful wave phenomena, only needs have each water molecule move up or down and then return to its place.

So, yada yada yada, bunch of late night bullshit sessions and out pops a Screw Theory.

If all things are connected at the basis layers, then waves may flow through this ‘fundament’ that affect all things whether or not perceived. Now this brings us back to the perception matters business. Well, perception matters but what we are talking about now is not individual perception as in the rhino on the road, but whether or not you or I can perceive events below a certain threshold. I’ll give you an example. Sight.

Yes, sight is very limited. Our eyes only will respond to the impact of photons. Anything smaller is not a photon and will not register (as far as we know but doubts are forming there as well) and anything larger is not a photon and will not register. Thus you can’t see radio. Or microwave. Or infrared. You get the idea.

So what if there are waves, affecting material which is sub atomic. No way you could perceive it. You can’t feel, that is to perceive, the molecules in your skin grating off on hard tiles. Of course you will say that you can certainly feel the skin getting scraped, but what I am talking about is less than a fractional part of the individual cell. You can’t feel it. Now at some point a large enough number of these individual atoms will be scraped off to form a few cells and yes, then you can feel it. But not at the beginning, sub-atomic level. Please note though, that you are affected by the sub-atomic level whether or not you perceive it.

There you go. Perception, it’s a funny thing. You perceive the rhino and your day is affected by that perception and perhaps many weeks. You don’t perceive the gradual erosion of cells in the lining of the knee, and your whole life is impacted. It is all a matter of what level the perception is occurring.

This relates to the economy how exactly? Well, good question.

Our evolved theory is that the perception of events at the individual human macro level of consciousness will affect (that is, percolate down to and interact with) the ‘fundament’ through ‘waves’ or forces that operate at that level and are beyond perception at the macro level. 

While this effect has been noted by historians (‘the wave of revolutions’ that swept Europe, the ‘wave’ of illumination that we called the Renaissance), and by economists, ‘the business cycle’, most of these perceptions of the effect are themselves at a macro level, and even worse, mostly seen by looking back.

I hate looking back. Wouldn’t it have been nice to know that a wave of tech ‘pumping’ was building?  Wouldn’t it be nice to know in advance that a  Gold Cabal intent on successfully suppressing the price of gold was likely to arise. And just (about) how low they would succeed in driving the price, and how long the suppression was likely to last? Damn nice to know.

Well, it is possible. If we speculate that a gold price suppression conspiracy exists which has been successful for several years, then we can predict when it will end. Not by the amount of gold to be loaned, nor by the leasing rate, but rather we can predict its demise based on the total number of people who perceive it, and the intensity of the instance of perception. [Conspiracies are easy as they rarely function after awareness seeps into those who are the object of the conspiracy. So these are usually easily predicted.] As a gold price suppression conspiracy affects many people and groups, we could pick one group with sufficient ‘weight’ to counteract the ‘energy’ of the conspirators and say that the conspiracy will end when the members of the group become aware enough to trigger the surge effect.

By way of explanation, the surge effect is the label on a specific type of communication. This is the last surge of people telling people until just about everyone has heard it and discussed it. An example might be the surge following the bombing in Oklahoma City. Surge effects frequently occur in isolated entities (sub groups concerned with specific themes, such as earthquake aware people all rushing to tell each other of a specific event).

So what I am postulating based on our house of theory cards is that it should be possible to plot out supporting trends rising or falling in the ‘fundament’ and apply data mining and logical analysis (plus our No Context Analysis method) (deleted to maintain confidentiality-Ure) and determine just what trends or waves are rising which will affect us all.

Basically, in a long-winded fashion, I am describing what every other analyst seeks, a view into the future. So our goal is the same as all others, to know what is going to happen before it does.

Our approach involves a CAD program (this is the how we do it section), several thousand arbitrary indexing rules applied to information, lots of perl scripts to go seek info off the net and return data points, some prolog code to thrash about and quantify and apply the rules and spit out our data points. These points are loaded into the CAD program (Intellicad –really solid product) by a Lisp program, and plotted onto a 3d graph which actually represents 5 dimensions as we include time plotted on its own layer and time within the context of the plot where the right of the drawing represents the future, and the left the past shading into present (an aggregate base for our step off numbers), and the top represents amount of time compression, and the bottom is the ‘looseness’ of time.  The other X Y Z axes represent Immediacy of Perception, the Lifespan of the Instance (remember the rhino – exactly. This is how long you remember any perception where the ‘you’ is the public who perceived it.), and the Reality of the perception (this is a value of the immediacy of the perception – that is, if you discover your spouse committing a crime, it has much more reality value than if you discover that your spouse had committed a crime in the past, or was considering a crime in the future.)  The model also has both layers and entities. Layers can be in any axis (i.e. across the vertical). Entities exist of independent points which are clustered by a common theme (i.e. Currency-markets, Political-Scandal, Economy - Bribery) and cross layers and axes. Time (calendar) is the base layer and is presumed linear, but as stated before, time is also built within the constraints of the model. 

Now of course you will note that I am arbitrary as hell in assigning values. As a necessity these values evolve over the course of the work. Initially while it appeared that the Reality factor was necessary, it was not until later that I realized the impact of that value.

 I understand that this is where most readers will bail. But many logical conclusions drawn through the work were independent of any assigned value for any given weighting factor. In other words, if we assign a value of 5 to the weight of the Reality factor, as long as we are consistent across the formulas, the weight effect stays the same as if we assign a value of 19.  Probably this last doesn’t make sense, but let’s continue anyway as my time and your attention doesn’t need the abuse of more on this now. Suffice it to say, that after looking at the data, certain impressions of formulas emerge that may be accurate enough to use in prediction.

That’s the goal after all; to have this theory be proven is fine, but the real fun comes in being able to increase the ability to guess as to the shape of future events. Nothing more than very sophisticated tealeaf reading, only our tea leaves are tidbits of available public information. It is the impact of the perception of the information that we are attempting to plot out with an idea toward prediction.

I offer no prognostications, as those are mostly linear progressions that derive from known or repeatable events. So a prognostication is a reasoned guess about, say the progress of a disease. The doctor takes into account the state of the patient, the type of the disease, and what has happened in the past to others equally fit with the same disease. The likely outcome will be within the range suggested by the doctor. That is a prognostication. What we do are predictions. Predictions in the sense of ‘pre saying’ the future. What can be derived from the model and tool are not prognostications because (we presume) this point in history/time has not happened before. So we have no valid object of comparison. Which makes our readings of our data predictions.

That these may be based on something more than a wild ass guess is not any guarantee of surety. We are still fumbling our way in using the tool that seems to be gradually appearing out of our Screwy Idea #153. But these are still wild ass guesses. However, as stated before, these guesses were predictive (starting in Oct of 1999 with a ‘jelling’ in Jan 2000) of the dot com bubble pop and its impact on certain stocks. 

The complex systems of our global human macro layer that we call our ‘markets’ are actually one of the more predictable (success in ‘pre saying the future’) macro layers that we have found. The war/peace layer also appears to be one of the easy ones. Some other time I can go into why certain layers are likely to be easier, but basically it has to do with both the energy amounts inherent in the layers and the existence of measurable feedback mechanisms within the layer. It should be noted that these layers are conceived of as layers in an ocean with active and passive, dynamic and subtle currents. There appear to be interactions between the layers as currents (threads, streams) can run through multiple layers (i.e. a wave of innovation that goes through a business layer, a military layer, a religious layer and a political layer more or less simultaneously).

We ‘read’ our model by plotting all kinds of points, assigning associations to layers and entities, and then by looking at it as though an atmospheric picture of the weather. When looked at this way, we usually see a multicolored masses of smog clumping all about with little solid indication of organization. But, occasionally and increasingly, we are able to see the ‘dots’ of information begin to coalesce into distinctive weather patterns. What we look for are things similar to line squalls and tornadoes starting to form. In the case of the former, we see that the line squall sweeps through time and either gathers strength or dissipates with addition of new data points over time. We can also see that the squall is wide enough to involve large areas geographically. Location is an aspect of data points that can be viewed as its own layer. We all ‘know’ this intuitively and express it when we say in passing that it is ‘getting hot’ in the mid east. We are not usually meaning temperature but are actually expressing our intuitive grasp of a rising of the intensity of how we perceive information coming from that area juxtaposed to our existing mental data base of reference points for that area. So we all express it, if even as individuals are not aware of perceiving it.

Tornadoes on the other hand, are gathering tubes of data points seeming to cluster about specific entities. Usually these begin as a thickening of an entity within a layer which spreads to other layers. Usually the thickening spreads or infects other entities in its gathering.

Which brings us to the concept of a ‘tipping point’ which is also the name of a really good book on the subject. However, for our purposes here, you already grasp the tipping point. You know it in your cells from teeter-totters. When you can ‘feel’ the plank has gone over the ‘tipping point’ and you cannot reverse your motion by shifting your body weight. Even walking can demonstrate it. Try to fall. Slowly lean out with one leg raised behind you. At some point you will be looking back on the tipping point. You will know it, truly know it, ONLY when you cross it. Trying to predict the tipping point in sports or walking is what results in falls. Usually, in our model, the tipping point is foreshadowed by the formation of a tornado. These seem to form, indicating a date. The layers involved in the tornado will change once the mass of the tornado forms. Thereafter, the entities involved are forever changed. So are all future data points coming in for all other entities.  An example is the creation of accurate clocks for determining longitude at sea. Thereafter many entities such as shipping , markets, deaths of British sailors, price of tea in china, all kinds of entities changed.  All because some entities had reached their tipping points.

When our tornadoes form, they form around a calendar date. And are composed of entities. We had one form in Oct of 1999 into which various entities participated in a mish mash until it really firmed in Jan of 2000. That one involved US geography entity, mass financially associated entities, and seemed to indicate Feb as the time . Bear in mind that our scales are not as accurate as we would like. So short-term use is really dodgy. We use one edge of the tornado to say when the tipping point will be reached. And so far have been wrong on dates, as the tipping point can still only be hinted at, and only accurately measured after the tipping has occurred. But getting out of the market a week or two ahead of the top and a significant meltdown is good enough.

In an ironic reversal of our scale issues with short-term predictions based on the model, we see a generally more accurate view for specific attributes further out. This means that our model has indicated for the past few months that the probable bottom of the equity markets is Nov 8, 2002. However the amount of the DOW at the time is less than accurate though the range is still very specific as we are basically extrapolating across a layer and shooting a ‘laser’ through several entities. Then we look from our weather’s eye view seeking a nexus of entities at the edge of a data cluster where the laser intersects the leading edge of the cluster. This yields a segment of an entity. Sort of like trying to see just how weak the Gulf Stream is going to be when it reaches England based on testing its strength when it leaves Jamaica.  Another wild ass guess.

By the way, our model indicates that if all things progress as they are now, (highly unlikely) the Dow will bottom out at 463.  Pretty severe view, but do not take it to heart. As we get closer to the event timeline of the bottom, much more impacting data comes in which raise or lowers various entities among the layers and thus alter the prediction. But baring the emergence of very heavily weighted new entity clusters, the long-term trend is down to bottom in Nov 2002 and then a flat line (more or less) out through 2007 (as far as we allow the model to run).

But, things change, they always do. So this prediction will change over time.

The thing is though, that a large tipping point vertex appears to be forming now. It indicates July 14 shading into early July 15^th as the time. There are various entities involved. These are Military (general, not specific to any country so may be a new weapon type?), Military (situational – as in a sudden border flare up as in Kashmir though these usually indicate accidents), Currency (monetary - includes markets for bonds, equities, derivatives, commodities) [strongest entity represented], Currency (source – such as a commodity, those things upon which currency is based), Currency (interaction – markets, banks, the social aspects of things – such as debt relief demands against the IMF or the suit against Microsoft), and Weather/Climate.  This last is deliberately kept at a broad, or meta entity level for various reasons. As a consequence no predictions on what the weather event will be but floods always have the favored position due to their Reality factor and large-scale impact. There are other entities involved, but these are not yet forming enough to be more than travelers or those entities that will be pulled along with the tipping point. The Political entity, general, is thickening up, but nothing specific yet and this entity has yet to ‘color’ any of the Currency entities to predict that the tipping point will arise from the political area.

The geography involved is US (middle of the country seems to be indicated), South Pacific (many points recently about the Philippines are thickening that layer and shading away from China), and significantly, South America, specifically, Bolivia, and Argentina, and Brazil. Peru is also very represented but almost exclusively on the layer of GeoStability (includes earthquakes, floods, anything that causes dislocations). It does have some thickening of the Money entities, but nothing significant as of yet.

So now, the prediction as the model seems to indicate is for a tipping point event that will arise from South America, middle part of the US, or the deep South Pacific around Philippines. The tipping point will be focused on what we call the Money entities and will have impacts on currency and its use between peoples or nations.  The tipping point will also significantly affect the military in a general sense. It may be suggesting some event, which will have a direct action on the currency exchange system.

The reason for the vagueness is that there are thousands of ways to slice and dice data. As a point of interest, there has not been an entity to represent the currency exchange system to date as there was no differentiation for the exchange system until this forming. Entities change over time. They mature and gradually diffuse or grow and evolve, acquiring more aspects from other entities as they do. So there you have it. Bear in mind the disclaimer, this is a test shot of a model that will need a couple of hundred years to be close to reliable.

As a footnote, this model is likely to not show what the tipping point is until after the fact by some days or weeks. We may be lucky in that come July 16 the headlines may scream ‘Freak wave causes Submarine to cut global currency exchange phone lines’ or something similar but not likely. More likely is that an obscure, barely noticed event in one of our regions will show strength over the next few weeks and end up being seen later as significant in the shift of the entities involved.

In conclusion, bear in mind that this is a work in progress that I will expect needs years of further work to be more than a computerized form of tarot reading. However, the past performance of the model for increasing the accuracy of our guesses has been correct. Just cause I’m crazy don’t mean I am inaccurate.

Crazy?  Anything but.  The method got these folks out of MSFT just before its all-time high.  If nothing happens on the 15th, don't be disappointed.  It might not be obvious for a while.  But it's well within the realm of how I read the physics books, that the last week or two of the market was like the tide going out before a tsunami comes rolling in. 

The market's in for a good pop in the morning on the back of MSFT, but let's see if anything above the perception horizon comes around this weekend, because even though the MUC doesn't predict it, quantum events may come at us quite literally, out of the blue.  If the above work is right, there's a a strong potential for something right away.  And again, if it does happen, I have no idea where this forecast came from...

If you picture a series of tall, skinny tornados in a building that's 20 stories high, all coming down to a single big tornado on the first floor, that's what this software is about.  There are three or four tornados becoming solid around the 7th floor and they look like they merge into something ugly this weekend.

We will endeavor to keep you posted after the fact...on whether these guys have a hit...or a miss.

Write when you get rich...

 

George

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All contents (c) 1998-2001 by George A. Ure, MBA, except authors as linked or noted

"Rechargeable Money" and "Traceable Tender" (c) 2001, George A. Ure