An Autonomous Agent

exploring the noosphere

Category: economics (Page 4 of 8)

Flow Chart of Price Formation and Reaction

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On February 21, 2014

In economics, finance, investing, psychology, stocks, thoughts

I think that live price data is important, however, there are far more important numbers to be recorded in a financial market. Live data such as: current number of shares long; current number short; size of investor gain (or another measure to see how long a specific investor has been holding his/her position), etc.

Price can change in a matter of micro-seconds; in the 1930’s this observational task would have been deemed impossible — keeping track of such rapid price changes. Now, computers allow humans to do this with ease. What is preventing society from recording and publicly displaying other data in rapid manner. In other words, can we not use our computers to observe the ubiquitous “invisible hand” of market exchange?

I can only imagine visualizing this data analogously with the video showing flights traveling around the world:

Now, imagine that all the flights leaving Europe are people exiting (shorting or selling) an asset. And imagine that all the flights entering Europe are people buying the asset. Obviously, some issues since # of buyers == # of sellers in real market.

Perhaps this can not be done — obviously, obstacle #1 is state regulations and the corporate black-box. Corporations would see this freedom of information as a threat to their competitive edge and states would deem this “anti-capitalistic.” I like to think that such live data, publicly available may help market regulators and the public make better decisions with regard to investment decisions. Most importantly, such data would immensely improve academic understanding of market behavior.

David Harvey

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On February 18, 2014

In anthropocene, anthropology, capitalism, david harvey, economics, finance, investing, social behavior, video, youtube

David Harvey has an amazing awareness of society. Listening to him discuss his perspective and ideas about cities, money, and capitalism brings with it the joy of great insight into the behaviors and relations of human activities which the intellectual listener will enjoy. I will have to eventually pick up a few of his books. For now, I will watch his lectures:

Das Kapital – Karl Marx

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On February 17, 2014

In anthropology, capitalism, das kapital, david harvey, didier sornette, economics, friedrich engels, karl marx, robert prechter

Das Kapital – The three volume set by Karl Marx and Friedrich Engels may contain the theoretical underpinnings for the observations of R. N. Elliott. The fundamental interactions involved in economics via social relationships between commodities lead to the development of Elliott Waves — later expanded upon by Prechter, Sornette, and others. More on this possible connection in a future post. Regardless, based on what I have read so far, I think this will be an interesting intellectual read. The well-worn hardback copy version I am reading, from a Boston library, was published in 1902; I wonder who has read this copy in the past 112 years?

Volume 1 – Capital: Critique of Political Economy
Volume 2 – Capital: The Process of Circulation of Capital
Volume 3 – Capital: The Process of Capitalist Production as a Whole

Ebook and PDF versions: here and here

Also, for some lectures and commentary on the book see David Harvey’s website.

Possible conception for The Organism which Marx refers to:

Simulated Stock Price Data – Ising Type Model

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On November 28, 2013

In computer, didier sornette, economics, investing, math, physics, Ralph nelson elliott, stocks

I am currently exploring stock price movements. I hope to publish a full post on my insights soon. Perhaps linking Elliott Waves with the fundamental tug-of-war between buy and sell price action. Here is a neat simulation of traders in an Ising type model. The resulting stock price simulation can be seen in the PDF. The model was created using 1,000,000 traders. If this is really the underlying nature of the movement of stock prices, then by observing a stock trajectory, an observer is really only getting a tiny fraction of the information about the state of the system. If there was a way to implement this model on a wide scale, the results would be really neat.

GIF animation of the model:
Red dots are traders short the stock. Yellow dots are traders long the stock. Orange dots are traders neither short nor long the stock.

Digital Currency, Bitcoin and “Money-over-IP” – Jeremy Allaire and John Beccia

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On November 6, 2013

In bitcoin, computer, currency, economics, education, finance, information theory, jeremy allaire, john beccia

I recently attended a presentation on Digital Currency, Bitcoin and “Money-over-IP” by Jeremy Allaire and John Beccia. The audience was general and the details light, but my general impression is that the future lies in digital currencies. Really amazing ideas can be spawned and generated through this new area of technology.

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