Dr D (dvv7) wrote,
Dr D
dvv7

Prediction in Financial Markets: True Uncertainty

Financial markets anticipate crashes even earlier than they occur. If you anticipate a crash in Fall, you sell now. Then, someone will be brave enough to speculate on it and short, then even slower funds follow and the change cascade itself down until there is a squeeze in stock supply and it jumps back up.

With financial markets, and prediction of their direction, it's anticipation, and pre-anticipation, and pre-pre--it is a true living in uncertainty. The kind of uncertainty that people synthesize in their own activity. This has direct parallels to the kind of uncertainty they observe in quantum physics. Intermediate layer, physical laws of materials and dynamics are deterministic: even if it's mathematically difficult to forecast when there will be a thunderstorm, it's impossible to observe that true uncertainty in that case. Again, It's either synthesised by human activity or registered on a level deeper than observed atomic borders.

P.S. A pre-crash on markets began today, Monday, August 10th and the outcome is quite uncertain. If we take a Gaussian view, we can say that there are equal a priori probabilities of having a strong crash in October 2009 AND having a strong bull run (of the same magnitude of as a projected crash) happening after the pre-crash passes away.

P.P.S Also, a discussion here http://bowin.livejournal.com/820572.html?thread=6921564#t6921564
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