On Sat, 8 Dec 2007 19:06:07 -0500, "Eisboch"
wrote:

Here's the "what comes first, the chicken or the egg" question though:

Does the technology produce the vulnerability or does the ever expanding
services made available by the technology make themselves vulnerable?

In my view it's the technology itself that produces the vulnerability.
Complexity follows the rules of unintended consequences - for every
intended expansion or result, you get four unintended consequences.

The problem is that you can't define what those unintended results
will be and that's where the exploitation or fault exists.

I don't think you can reign in technology or it's application. We may be
required to rethink what and how much of what we want to make dependent on
it.

That's a good point and something that I think is missing from the
equation of technological advance.

Access to information is instant. There isn't time to absorb and
process the information - to think and/or ask questions. Last week,
for example, there was a pipeline fire in Michigan which was reported
as "major" - the implication was that all four of the lines from
Canada were involved - the price of oil jumped $3 bucks and change in
seconds. Couple of hours later it was only two involved and finally,
one and it turned out not to be "major" at all - the line was down for
a day. Prices returned down, but the settlement for the day was about
..80¢ higher - restablishing an up trend instead of the prior down
trend based on lack of news.

Back when, it would have taken time to react. Questions would have
been asked, calls made, etc. The event wouldn't have impacted because
time would have been taken to find out what happened. That has
completely changed and is one unintended consequence of instant access
which speculators can exploit to their advantage.

Those of us that are getting long in the tooth will be satisfied with
less, but imagine explaining to a 16 year old that they really don't need a
cell phone.

Agreed.

Which, I guess, is exactly what your point is.

I doesn't matter though. The genie is out of the lamp and there's no
turning back.

I agree with that, but you still have to at least try to anticipate
the results if the Endless Knot we have created dissolves or breaks in
multiple places.

On Sun, 09 Dec 2007 01:36:36 GMT, Short Wave Sportfishing
wrote:

On Sat, 8 Dec 2007 19:06:07 -0500, "Eisboch"
wrote:

Here's the "what comes first, the chicken or the egg" question though:

Does the technology produce the vulnerability or does the ever expanding
services made available by the technology make themselves vulnerable?

In my view it's the technology itself that produces the vulnerability.
Complexity follows the rules of unintended consequences - for every
intended expansion or result, you get four unintended consequences.

The problem is that you can't define what those unintended results
will be and that's where the exploitation or fault exists.

I don't think that's true on the unintended results. Not to say
snowballs don't happen, but most complex systems are well thought out.
Malicious exploitation is another matter entirely.

I don't think you can reign in technology or it's application. We may be
required to rethink what and how much of what we want to make dependent on
it.

That's a good point and something that I think is missing from the
equation of technological advance.

Access to information is instant. There isn't time to absorb and
process the information - to think and/or ask questions. Last week,
for example, there was a pipeline fire in Michigan which was reported
as "major" - the implication was that all four of the lines from
Canada were involved - the price of oil jumped $3 bucks and change in
seconds. Couple of hours later it was only two involved and finally,
one and it turned out not to be "major" at all - the line was down for
a day. Prices returned down, but the settlement for the day was about
.80¢ higher - restablishing an up trend instead of the prior down
trend based on lack of news.

Back when, it would have taken time to react. Questions would have
been asked, calls made, etc. The event wouldn't have impacted because
time would have been taken to find out what happened. That has
completely changed and is one unintended consequence of instant access
which speculators can exploit to their advantage.

That kind of crap happened on trading board floors since people
started yakking and learned the power of rumor. It's simple
irresponsibility and greed, not technology.
Tying the 80 cent gain to that BS is a stretch too. If you listen to
the myriad "reasons" that "analysts" give to any market gains or
losses, it never makes much sense unless it is tied to real
fundamentals. The pipeline didn't even qualify to move the market.
Yak yak yak. Greed, greed, greed.
On the flip side, real info gets to real people, not just insiders,
quickly.

Those of us that are getting long in the tooth will be satisfied with
less, but imagine explaining to a 16 year old that they really don't need a
cell phone.

Agreed.

Which, I guess, is exactly what your point is.

I doesn't matter though. The genie is out of the lamp and there's no
turning back.

I agree with that, but you still have to at least try to anticipate
the results if the Endless Knot we have created dissolves or breaks in
multiple places.

When you consider current complexities and that things aren't breaking
down left and right, it's clear that contingency planning and backup
strategies are well established for most infrastructures.
I know "what ifs" were always a significant part of my job.
It's always going to get down to having thoughtful people in the right
spots. But sometimes the **** will hit the fan anyway.

--Vic

On Sat, 08 Dec 2007 20:14:33 -0600, Vic Smith
wrote:

On Sun, 09 Dec 2007 01:36:36 GMT, Short Wave Sportfishing
wrote:

On Sat, 8 Dec 2007 19:06:07 -0500, "Eisboch"
wrote:

Here's the "what comes first, the chicken or the egg" question though:

Does the technology produce the vulnerability or does the ever expanding
services made available by the technology make themselves vulnerable?

In my view it's the technology itself that produces the vulnerability.
Complexity follows the rules of unintended consequences - for every
intended expansion or result, you get four unintended consequences.

The problem is that you can't define what those unintended results
will be and that's where the exploitation or fault exists.

I don't think that's true on the unintended results. Not to say
snowballs don't happen, but most complex systems are well thought out.
Malicious exploitation is another matter entirely.

I respect your opinion, but even well thought out systems can fail
spectacularly and often for the simplest reasons.

January 28, 1986 - Shuttle Challenger blew up when an O ring failed in
the rocket booster igniting the liquid hydrogen.

February 1, 2003 - Shuttle Columbia disintegrated on reentry after a
piece of foam broke off the hydrogen tank striking the left leading
wing edge.

I'm sure we can agree that space shuttles are very complex systems
with triple and even quadruple system redundancies. Yet, even with
the redundancies, both were laid low by simple mechanical failure.

I don't think you can reign in technology or it's application. We may be
required to rethink what and how much of what we want to make dependent on
it.

That's a good point and something that I think is missing from the
equation of technological advance.

Access to information is instant. There isn't time to absorb and
process the information - to think and/or ask questions. Last week,
for example, there was a pipeline fire in Michigan which was reported
as "major" - the implication was that all four of the lines from
Canada were involved - the price of oil jumped $3 bucks and change in
seconds. Couple of hours later it was only two involved and finally,
one and it turned out not to be "major" at all - the line was down for
a day. Prices returned down, but the settlement for the day was about
.80¢ higher - restablishing an up trend instead of the prior down
trend based on lack of news.

Back when, it would have taken time to react. Questions would have
been asked, calls made, etc. The event wouldn't have impacted because
time would have been taken to find out what happened. That has
completely changed and is one unintended consequence of instant access
which speculators can exploit to their advantage.

That kind of crap happened on trading board floors since people
started yakking and learned the power of rumor. It's simple
irresponsibility and greed, not technology.

Really? Well, allow me to introduce you to something called
programmed trading and specifically October 19, 1987.

While there is still some debate over the exact causes, the most
respected reports on Black Monday (the 1987 one) "Brady Report" by
Nicholas Brady and Mark Carlson's "A Brief History of the 1987 Stock
Market Crash..." state without reservation that programmed trading at
the minimum was responsible for 50% of the total decline and
introduced the negative psychology inherent in any stock/market
fluctuation. Other factors were portfolio insurance selling, the
arbitrage potential between commodity markets and stocks and a flaw in
the European Bourses because of a major weather event.

As you are a "what if" guy and knowledgeable on the subject, I'm sure
you can recognize it as classic cascade failure.

Since then, limits have been placed on programmed trading to limit the
type of cascade failure seen on October 19,1987. but there are still
flaws in the system - fortunately, humans now have the ability to
intervene. Instead of mindless trading, human perspective is brought
into the trading equation.

Tying the 80 cent gain to that BS is a stretch too. If you listen to
the myriad "reasons" that "analysts" give to any market gains or
losses, it never makes much sense unless it is tied to real
fundamentals. The pipeline didn't even qualify to move the market.
Yak yak yak. Greed, greed, greed.

No it's not just greed. It's a case of resetting expectations and
market psychology.

It's instant information that makes the scenario plausible and instant
reaction causes the rise and fall.

And, for the record, yes - rumors have been and continue to be an
important part of any trading cycle - that's a given - can't argue
that.

But, and this is very important, under the old system, it took time to
develop and rationalize a rumor which would affect market movement or
even any particular stock movement - it was "soft" information -
ethereal if you will - that was always suspect. With instant,
theoretically "hard" information, the reactions are also instant and
without buffering. That will establish a higher floor, in particular
in commodities, if only because of the inherent psychology of limiting
losses - a group think gestalt would be another way to put it.

On the flip side, real info gets to real people, not just insiders,
quickly.

Which does what? Think about what you said - real people get "real"
info - or is it "real"? Was that Michigan information that moved the
market "real"? If you are a casual day trader and heard that, what
would be your reaction? Be honest - you are trading commodities and
hear that half of the Midwest's oil supply has blown up - what do you
do?0

Those of us that are getting long in the tooth will be satisfied with
less, but imagine explaining to a 16 year old that they really don't need a
cell phone.

Agreed.

Which, I guess, is exactly what your point is.

I doesn't matter though. The genie is out of the lamp and there's no
turning back.

I agree with that, but you still have to at least try to anticipate
the results if the Endless Knot we have created dissolves or breaks in
multiple places.

When you consider current complexities and that things aren't breaking
down left and right, it's clear that contingency planning and backup
strategies are well established for most infrastructures.

Contingency plans are exactly that - contingencies that we can think
of.

In any complex system, it isn't what you plan for that fails - it's
always the one thing you didn't plan for but in hindsight, was the
most obvious and glaring defect.

It's human nature.

I know "what ifs" were always a significant part of my job.
It's always going to get down to having thoughtful people in the right
spots. But sometimes the **** will hit the fan anyway.

Well, we will probably continue to agree to disagree. :)

Short Wave Sportfishing wrote:
On Sat, 08 Dec 2007 20:14:33 -0600, Vic Smith
wrote:

On Sun, 09 Dec 2007 01:36:36 GMT, Short Wave Sportfishing
wrote:

On Sat, 8 Dec 2007 19:06:07 -0500, "Eisboch"
wrote:

Here's the "what comes first, the chicken or the egg" question though:

Does the technology produce the vulnerability or does the ever expanding
services made available by the technology make themselves vulnerable?
In my view it's the technology itself that produces the vulnerability.
Complexity follows the rules of unintended consequences - for every
intended expansion or result, you get four unintended consequences.

The problem is that you can't define what those unintended results
will be and that's where the exploitation or fault exists.

I don't think that's true on the unintended results. Not to say
snowballs don't happen, but most complex systems are well thought out.
Malicious exploitation is another matter entirely.

I respect your opinion, but even well thought out systems can fail
spectacularly and often for the simplest reasons.

January 28, 1986 - Shuttle Challenger blew up when an O ring failed in
the rocket booster igniting the liquid hydrogen.

February 1, 2003 - Shuttle Columbia disintegrated on reentry after a
piece of foam broke off the hydrogen tank striking the left leading
wing edge.

I'm sure we can agree that space shuttles are very complex systems
with triple and even quadruple system redundancies. Yet, even with
the redundancies, both were laid low by simple mechanical failure.

I don't think you can reign in technology or it's application. We may be
required to rethink what and how much of what we want to make dependent on
it.
That's a good point and something that I think is missing from the
equation of technological advance.

Access to information is instant. There isn't time to absorb and
process the information - to think and/or ask questions. Last week,
for example, there was a pipeline fire in Michigan which was reported
as "major" - the implication was that all four of the lines from
Canada were involved - the price of oil jumped $3 bucks and change in
seconds. Couple of hours later it was only two involved and finally,
one and it turned out not to be "major" at all - the line was down for
a day. Prices returned down, but the settlement for the day was about
.80¢ higher - restablishing an up trend instead of the prior down
trend based on lack of news.

Back when, it would have taken time to react. Questions would have
been asked, calls made, etc. The event wouldn't have impacted because
time would have been taken to find out what happened. That has
completely changed and is one unintended consequence of instant access
which speculators can exploit to their advantage.

That kind of crap happened on trading board floors since people
started yakking and learned the power of rumor. It's simple
irresponsibility and greed, not technology.

Really? Well, allow me to introduce you to something called
programmed trading and specifically October 19, 1987.

While there is still some debate over the exact causes, the most
respected reports on Black Monday (the 1987 one) "Brady Report" by
Nicholas Brady and Mark Carlson's "A Brief History of the 1987 Stock
Market Crash..." state without reservation that programmed trading at
the minimum was responsible for 50% of the total decline and
introduced the negative psychology inherent in any stock/market
fluctuation. Other factors were portfolio insurance selling, the
arbitrage potential between commodity markets and stocks and a flaw in
the European Bourses because of a major weather event.

As you are a "what if" guy and knowledgeable on the subject, I'm sure
you can recognize it as classic cascade failure.

Since then, limits have been placed on programmed trading to limit the
type of cascade failure seen on October 19,1987. but there are still
flaws in the system - fortunately, humans now have the ability to
intervene. Instead of mindless trading, human perspective is brought
into the trading equation.

Tying the 80 cent gain to that BS is a stretch too. If you listen to
the myriad "reasons" that "analysts" give to any market gains or
losses, it never makes much sense unless it is tied to real
fundamentals. The pipeline didn't even qualify to move the market.
Yak yak yak. Greed, greed, greed.

No it's not just greed. It's a case of resetting expectations and
market psychology.

It's instant information that makes the scenario plausible and instant
reaction causes the rise and fall.

And, for the record, yes - rumors have been and continue to be an
important part of any trading cycle - that's a given - can't argue
that.

But, and this is very important, under the old system, it took time to
develop and rationalize a rumor which would affect market movement or
even any particular stock movement - it was "soft" information -
ethereal if you will - that was always suspect. With instant,
theoretically "hard" information, the reactions are also instant and
without buffering. That will establish a higher floor, in particular
in commodities, if only because of the inherent psychology of limiting
losses - a group think gestalt would be another way to put it.

On the flip side, real info gets to real people, not just insiders,
quickly.

Which does what? Think about what you said - real people get "real"
info - or is it "real"? Was that Michigan information that moved the
market "real"? If you are a casual day trader and heard that, what
would be your reaction? Be honest - you are trading commodities and
hear that half of the Midwest's oil supply has blown up - what do you
do?0

Those of us that are getting long in the tooth will be satisfied with
less, but imagine explaining to a 16 year old that they really don't need a
cell phone.
Agreed.

Which, I guess, is exactly what your point is.

I doesn't matter though. The genie is out of the lamp and there's no
turning back.
I agree with that, but you still have to at least try to anticipate
the results if the Endless Knot we have created dissolves or breaks in
multiple places.
When you consider current complexities and that things aren't breaking
down left and right, it's clear that contingency planning and backup
strategies are well established for most infrastructures.

Contingency plans are exactly that - contingencies that we can think
of.

In any complex system, it isn't what you plan for that fails - it's
always the one thing you didn't plan for but in hindsight, was the
most obvious and glaring defect.

It's human nature.

I know "what ifs" were always a significant part of my job.
It's always going to get down to having thoughtful people in the right
spots. But sometimes the **** will hit the fan anyway.

Well, we will probably continue to agree to disagree. :)


Add in AOL. Look what that brought us.

Short Wave Sportfishing wrote:
On Sat, 08 Dec 2007 20:14:33 -0600, Vic Smith
wrote:

On Sun, 09 Dec 2007 01:36:36 GMT, Short Wave Sportfishing
wrote:

On Sat, 8 Dec 2007 19:06:07 -0500, "Eisboch"
wrote:

Here's the "what comes first, the chicken or the egg" question though:

Does the technology produce the vulnerability or does the ever expanding
services made available by the technology make themselves vulnerable?
In my view it's the technology itself that produces the vulnerability.
Complexity follows the rules of unintended consequences - for every
intended expansion or result, you get four unintended consequences.

The problem is that you can't define what those unintended results
will be and that's where the exploitation or fault exists.

I don't think that's true on the unintended results. Not to say
snowballs don't happen, but most complex systems are well thought out.
Malicious exploitation is another matter entirely.

I respect your opinion, but even well thought out systems can fail
spectacularly and often for the simplest reasons.

January 28, 1986 - Shuttle Challenger blew up when an O ring failed in
the rocket booster igniting the liquid hydrogen.

February 1, 2003 - Shuttle Columbia disintegrated on reentry after a
piece of foam broke off the hydrogen tank striking the left leading
wing edge.

I'm sure we can agree that space shuttles are very complex systems
with triple and even quadruple system redundancies. Yet, even with
the redundancies, both were laid low by simple mechanical failure.


Do any of you remember the nation wide telephone problem that occured on
e day in '89? I don't know the specifics of the problem but a bug in SS7
caused all of the major switches across the country on AT&T's network
started shutting down and would not restart. Took a software change to
fix the problem. I believe that the outage lasted about 10 or 12 hours.

On Sun, 09 Dec 2007 09:47:10 -0500, BAR wrote:


Do any of you remember the nation wide telephone problem that occured on
e day in '89? I don't know the specifics of the problem but a bug in SS7
caused all of the major switches across the country on AT&T's network
started shutting down and would not restart. Took a software change to
fix the problem. I believe that the outage lasted about 10 or 12 hours.

I don't remember that, but used a ma bell then, Ameritech. Don't
remember any work outages either, but maybe I was off.

--Vic

On Sun, 09 Dec 2007 09:47:10 -0500, BAR wrote:


Do any of you remember the nation wide telephone problem that occured on
e day in '89? I don't know the specifics of the problem but a bug in SS7
caused all of the major switches across the country on AT&T's network
started shutting down and would not restart. Took a software change to
fix the problem. I believe that the outage lasted about 10 or 12 hours.

I mentioned it earlier in the thread.

The site outage took 12 hours - the results in resetting the system
took 28 hours in total to get everything back on line.

Another cascade failure. $5 relay part and havoc ruled the day.

On Sun, 09 Dec 2007 14:33:43 GMT, Short Wave Sportfishing
wrote:


Well, we will probably continue to agree to disagree. :)

I don't think we really disagree, more like we view the consequences
of some breakdowns differently.
I think we can agree the shuttle disasters occurred because "simple"
systems failed. Frankly, for all the admiration I have for the teams
that put the shuttles together, the management side let them and
astronauts down. You may feel differently, but I view both failures
as preventable and unnecessary. The o-ring problem was known,
and so was the ice hitting tiles. They took chances they didn't have
to take. Given the tremendous achievements of the shuttle program
it's difficult to come down on them hard, but that's my opinion.
I was really ****ed seeing my heros die, and less so that 40% of the
shuttle fleet was destroyed by an o-ring and a piece of ice.
On the market side, I'm not well versed since I don't trade except
commodity futures on a small-time level, and consider that gambling on
my part. Outside of some floor trader price manipulation to do some
"personal arbitrage" on buy/sell prices, sometimes by hitting stops
- a problem I think has been reduced by computerization - I've had no
complaints since I quit using stops. I've found that supply and
demand always has the final say, and if I'm right I'm right, wrong I'm
wrong.
If you're a day trader, or look at portfolio value fluctuations daily,
that's a psychological issue - and I'm not imputing any of this to
you, BTW, just yakking.
When I first responded to this topic I was thinking of basic
power/communication infrastructures, not Wall Street.
But since I'm here, and you know more this than me, how the hell did
the Great Depression occur, and could it happen again?
Not asking for an essay, as I don't want to put you out and keep you
from testing boats.
My real "economic" concern is that we don't produce our own goods, and
China has us by the balls.

--Vic

On Sun, 09 Dec 2007 11:41:05 -0600, Vic Smith
wrote:

On Sun, 09 Dec 2007 14:33:43 GMT, Short Wave Sportfishing
wrote:


Well, we will probably continue to agree to disagree. :)

I don't think we really disagree, more like we view the consequences
of some breakdowns differently.
I think we can agree the shuttle disasters occurred because "simple"
systems failed. Frankly, for all the admiration I have for the teams
that put the shuttles together, the management side let them and
astronauts down. You may feel differently, but I view both failures
as preventable and unnecessary. The o-ring problem was known,
and so was the ice hitting tiles. They took chances they didn't have
to take. Given the tremendous achievements of the shuttle program
it's difficult to come down on them hard, but that's my opinion.

It's true, but you have to consider humans as a part of the system -
it's not only just the part, but the decisions that lead up to how
that part was utilized.

In both shuttle cases, humans made the decision based on the best
evidence available at the time.

But since I'm here, and you know more this than me, how the hell did
the Great Depression occur, and could it happen again?

Of course it could.

Five conditions are commonly considered necessary for a market crash -
prolonged period of rising stock prices, irrational exuberance, P/E
ratios exceed long-term averages, and extensive use of margin debt and
leverage by market participants. There are other psychological and
monetary conditions, but those are the biggies.

In 1929 you have all five conditions plus economic features like
communications technology (radio/telephone), increasing use of
automobiles, begining of civil aviation, telephone and the power grid
development. Monetary power was held by several corporations and two
or three brokerage houses. Minor houses became involved in heavy
margin activity.

Deep recessions always occur with leading edge indicators. In the
summer of 1929, it was a contracting economy (took much production,
too much money), decreasing confidence in the financial system and
loss of confidence due to a series of financial scandals.

Sound familiar? :)

My real "economic" concern is that we don't produce our own goods, and
China has us by the balls.

So does any number of countries and for a variety of reasons.

Look into it sometime and see what havoc the sub-prime market is
having on smaller Eurpoean countries.

It's scary.

"Short Wave Sportfishing" wrote in message
...


Look into it sometime and see what havoc the sub-prime market is
having on smaller Eurpoean countries.

It's scary.


You just made an extremely good point, Tom.

The current housing/credit crisis is not a USA specific issue or problem.
It's world-wide.
The media and spin artists give the impression that it's unique to the
continued downfall of the USA.

Eisboch