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To: Chip McVickar who wrote (275)	6/24/1998 9:59:00 PM
From: Michael Friesen	Read Replies (1) \| Respond to of 3536

Chip et al, The thing about population biology to remember is that even simple systems can become "chaotic" - butterfly effect, etc - which renders long-term prediction impossible. So applying it to economic systems would seem to have the same problem. For example, one trader buys silver which provides the last tick required to set off a series of trend-following funds' stops. Even though the supply/demand is unchanged whether or not that one trader bought, the subsequent action alters participants' psychology which trickles into intermarket effects, etc. Michael

To: Chip McVickar who wrote (275)	6/25/1998 11:51:00 AM
From: Jerry in Omaha	Respond to of 3536

Chip; <<"Here cyclic change is explained. It is a rotation of phenomena, each succeeding the other until the starting point is reached again.">> Aldus Huxley suggests that the brain evolved as a tool for analysis and prediction and the The Book of changes, (yes, the Wilhem translation - the best) is a grand attempt to map a coherent pattern onto observed reality in order to predict the future by the process of calculation, the world's first attempt at Technical Analysis. <G> I always was struck by the Cartesian flavor of The Book of Changes where the first principle is not "I think therefore I am," but rather, "Things Change." This led to the notion that through the observation of cyclic change an understanding about the nature of the universe could be obtained. Such an understanding would assist our brains in their tasks of analysis and prediction. But there is a hitch, a Catch-22, cycles are not linear, not progressive. In a cycle all points are equal, there is no beginning and no end. So the problem became where to start. Derivative from the operations of randomness a starting point thus may be determined permitting the sequencing of one event following another in the inexorable cyclic pattern. The I Ching is derived from the ultimate nature watchers ever to have lived. The generation of a random number is today the Holy Grail of high-tech high priests. Yarrow stalks or coins are the random access generators of those ancient Chinese observers and still used today. It always has fascinated me, these appeals to chance, common to oracles, gamblers and quantum physicists; from random number generators, bird guts, tea leaves to casinos, institutions for the study of cyclic changes, brokers and their charts and futurists of every stripe. How interesting that an appeal to chance, randomness itself, can be coupled to such an eclectic range of predictive powers. <<"Old mental tools like historical economics" are often hard to shake off.....their spell is ingrained.>> The bigger the spreadsheet the longer it takes to re-calculate when new terms are entered. Learning is easy for kids because they have nothing but cells to fill and have no need continually to re-compile. When we learn something new it's likely we have to un-learn even more. For many this is a painful experience and soon they figure they have learned enough. Random rules!! Jerard P