Showing posts with label a-life systems. Show all posts

Sunday, July 26, 2009

Comment on Artificial Intelligence and Artificial Life

Evolving since John Holland's "genetic algorithms" in 1975, there is a solid literature in "Artificial Life" which goes well beyond "artificial intelligence". Search on "Chris Langton", "Symposium on Artificial Life", and "Santa Fe Institute." The work stirs deep anxiety and overt hostility from many and tends to remain low visibility.

Treading on heresy, I discount those who discount the idea that the internet and electronically mediated corporations could become "alive" or might as well be alive, because skeptics have no proven, calibrated tools which to detect e-life, or a-life, looking from the bottom up. What does it look like to a cell to be part of a human body? How does it change the cell's life? Not very much on a moment by moment basis, for sure.

You'd think those same skeptics would argue that a human body is "just cells" and there is no larger animating life (such as us) that emerges from or inhabits that active system of cells. Given that single example of multilevel-multicellularism, what possible basis is there for arguing it does NOT exist on other scales? Pure human vanity and remnants of the desire for humans to be the center of the universe and the greatest creation of God or nature are emotion not reasons.

I think the burden of proof should be the other way. What shows that we are NOT already part of a larger effectively-alive structure?

Science, please, not legend, should guide the exploration of "life". This is a rather critical question with very profound implications that most people find uncomfortable and inconvenient. We need to look at it more deeply. It is far more important than global warming.

Tuesday, October 07, 2008

Now what - contemplating the market crash

You say "Americans deserve to hear much more detail about how the candidates would reform the financial system to prevent another crisis like this one."

I think we desperately need to expand the frame in which "this problem" is perceived. That discussion should precede solutions within that frame.

For one thing, this cannot be isolated to be a "financial system" problem. It involves other economic and social systems, including trust, social decision-making, governance, jobs, social safety nets, education, attitudes towards expertise, sources of blindness in how humans see the world, etc.

They are all tangled. They cannot be solved "separately", or put into a priority order. If there are 200 holes in the bottom of the boat, addressing the "three most important ones" doesn't really cut it. Causes, effects, symptoms, are in tangled feedback loops.

Most of all, I don't think that 200 bright people can "solve" this while the rest of the country and world watches TV, or that it will be solved by voting to pick the best of the two solutions they come up with in some back room somewhere.

A billion people are willing to help. How can that work? THAT's the question we should be addressing.

— Raymond, Detroit

Thursday, August 16, 2007

Why do smart people do dumb things - Countrywide

Countrywide Financial Corporation is the latest case study of how smart people do dumb things. What is surprising, in retrospect, is that failures of this magnitude are not studied with the zeal that commercial airline accidents are studied. After all, probably as many people are hurt or killed by the indirect effects.

Still, are we learning from experience? Or simply repeating the same mistake over and over? Airliners use cockpit simulators to train pilots to avoid errors -- what do we need for CEO's and average home buyers?

What comes to mind is a short poem by Shel Silverstein " The Slithagadee. I can find many variations of it on-line, so I'll just quote it as I remember it:

The Slithagadee.

Oh, the Slithergadee
Came out of the sea.
He caught all the others,
But he won’t catch me.
No, you won’t catch me,
You old Slithergadee.
You caught the others,
But you wo...
—Shel Silverstein

Anyway, here's a few facts on Countrywide Financial from today's LA Times. My excerpts focus on two things:

the psychology of feeding frenzy and how, as with "only a foot" of water on the road, you can find your car swept away, and
How "systems" effects mean everything affects everything else -- there is no immunity.

Credit crunch imperils lender

Worries grow about Countrywide's ability to borrow -- and even a possible bankruptcy.

By E. Scott Reckard and Annette Haddad
Los Angeles Times Writers

August 16, 2007

[Excerpts]

Angelo Mozilo, chief executive of Countrywide Financial Corp., has been fond of saying that the company became America'sNo. 1 mortgage lender by being smarter than the competition.

In a harangue to Wall Street analysts early last year, the combative Mozilo denounced upstarts for shoveling out too many loans, too easily, to too many people with bad credit, heavy debt and skimpy income.

"I've been doing this for 53 years, and I've never seen that situation sustained," said Mozilo, who co-founded Calabasas-based Countrywide in 1969. "Eventually they gag on it."

Dozens of home lenders have indeed collapsed as defaults have surged on loans made to people with poor credit during the housing boom and as Wall Street has turned off the money tap that funded many of those sub-prime mortgages.

But rather than emerging bigger and stronger as Mozilo predicted, Countrywide -- which made 1 of every 6 home loans in the U.S. in the first half of this year -- now finds itself battling not just its own growing defaults but also a widening credit crunch stemming from the nationwide sub-prime mortgage meltdown.

On Wednesday, the company was said to be having trouble borrowing money on a short-term basis, securities analysts discussed the possibility of a Countrywide bankruptcy and the firm's stock price tumbled 13%, bringing its loss for the year to 50%.

An insolvent Countrywide could also do more damage to the country's already weakened housing market, said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication based in Bethesda, Md.

"It would be a huge shock to the U.S. housing system and the mortgage system as perceived around the world -- and make an already bad situation terrible," Cecala said....

"The problems Countrywide is experiencing has nothing to do with its mortgage business," Cecala said. "By all measures, Countrywide is a well-run, profitable company. What they're finding out is that although they thought they had diversified funding sources, nothing is diversified in a worldwide credit crunch like we're in now."

In 2003, old-fashioned 30-year loans with fixed interest rates and substantial down payments made up about two-thirds of Countrywide's loans, said mortgage executive Bill Dallas, whose Agoura Hills-based sub-prime lender Ownit Mortgage shut down early this year.

By last year, only one-third of Countrywide's loans were of the traditional type, with the rest spread among the more exotic loan variety, Dallas said. He said Mozilo, who had often been quick to criticize rivals for being overly aggressive, had found himself immersed in the same businesses as his competitors.

"Every section of the business that has failed, they're in there big time," Dallas said.

At some branches, managers would buy lunch every day for their staff to keep them at their desks working.

At the height of the boom in 2004 and 2005, it wasn't uncommon for a typical Countrywide loan officer to sell 20 sub-prime loans a week. "It was a feeding frenzy," said one former Countrywide employee who said he joined the company in 2004 and, after six weeks of training, made $6,000 to $8,000 a month. As fast as loans could be signed, they could be sold to investors, according to the former employee, who declined to be identified....

Over the years, Mozilo's pay packages -- $48.1 million in 2006 alone -- ballooned along with his company's fortunes.

Countrywide also bills and collects payments on $1.4 trillion in mortgages for itself and other lenders. What's more, Countrywide is the largest customer for Fannie Mae, the big government-sponsored mortgage buyer. More than one-third of all mortgages sold to Fannie Mae comes from Countrywide.

"The question is, is Countrywide too large to fail? Will the Fed allow it or will it need to step in and bail it out?" Cecala said.

A bailout of Countrywide would make the government's efforts to save automaker Chrysler in the 1970s look puny.

"Countrywide is more important than Chrysler was back then, particularly given the fragile state of the economy and so much tied to housing," Cecala said.

Of course, what's not mentioned is why a healthy company needs to borrow money in the short term to survive. Where did they put all their rainy-day savings from prior profits? Hmm. IT does sound like the "hedge funds" who were so sure of profits that they borrowed against the value of everything they owned and bet it on this "sure thing" -- except the nag broke a leg on the far turn of this track.

If so, this is really no different than the employee who "borrows" $10,000 from the bank till at lunchtime to go bet it on a sure thing and return it by the end of the day and no one will know.

Maybe we need to learn to recognize the typical signs and symptoms of unjustified reliance on ... hot air ... as a basis for business decisions or governmental policy decisions.

What is particularly dangerous, as I've pointed out before, are positive feedback loops, where the "reason" something is becoming more attractive is that "it's becoming more attractive." This phenomenon accounts for some Hollywood fame, where the only reason one can see for why this unremarkable person is famous is that they are famous and it feeds on itself.

That may even be a great strategy to make a buck on as it rises, as long as you stay aware that on any morning the wind may shift and suddenly it is falling just because it is falling, and the spiral up becomes a death spiral down.

Also, "amplifiers" are wonderful things, used correctly. For financial investments, "leveraging" you funds so that you only have to actually shell out 5% of the cost of something (right now) to "buy" it can make sense if the "it" will make you piles of money rapidly. Again, the problem comes in feedback, where you start amplifying the amplifier, etc.

Before long this vortex "takes on a life and momentum of its own", for exactly the same mathematical reasons that a hurricane or tornado starts sucking in surrounding air and "feeding on" the energy in it to become even larger, which lets it feed more, etc.

But, all such "fools gold" will have to turn around some day. This sort of thing is like "silly putty" or cornstarch fluids, that act "solid" if you keep moving fast, but turn instantly to "liquid" if you ever stop moving. (YouTube video worth watching of college students dared to run across such a vat of "liquid". This is great! )

In other words, this is a "good idea" only if you are a heart-beat away from an exit strategy. Otherwise, it is a pure pyramid or "Ponzi scheme" and the company "built on" it is a "house of cards."

There are many examples of such spirals that appeared as magical money machines and seemed from within that they would never end, like a credit card on a company that never remembered to bill you. Then, one day, the accumulated bill arrives. And you better have saved up enough "profit" to be able to bail out, and not sent it all to stockholders on re-invested it.

Tulips were the international craze in the 1700's, I think. Dot.com's. Pet Rocks. The Hula Hoop, 5 cents worth of plastic that sold for $2.00. Actually, the company that made Hula Hoops lost money, because they put everything they had earned into a brand new factory for making even more Hula Hoops, just as the craze ended.

So, again, the "hazards" of this strategy are well known in the business literature. The "right" way to win money in the long run is known. And the reality, that frail humans succumb to the "momentum" is also well documented.

But human ego is a fickle friend. "Just one drink." "Just one more investment and then we'll get out." "Just wait until it comes back up to where we bought it, and we'll sell it without recognizing a loss. "

Oh, the Slithergadee
Came out of the sea.
He caught all the others,
But he won’t catch me.
No, you won’t catch me,
You old Slithergadee.
You caught the others,
But you wo...

This is why a long solid history of "consultation" with a very diversified group of friends, preferably of different cultures and located in different counties, is a good idea. In fact, it's the only strategy I'm aware of that can prevent this kind of localized shared blindness, group-think, from taking the reins away from even very strong, very solid thinkers.

And, even then, that won't work if you reserve the right to just ditch you best friends and redefine them as "enemies" with "negative thinking" when they tell you that you are wrong and making a terrible mistake.

Of course, it never looks like a mistake from inside to the person making it. Think about it. That's the subtlety our school system doesn't train us for. Humility, or just experience ( which is wisdom acquired just after it was needed. ) Maybe a simulator game.

Here's the key lesson: the mind is a fickle friend. Your "obviously" creating sense has blind spots that can ruin your whole day.

Or, as Dennis the Menace said, sitting in the corner being punished - "How come dumb stuff seems so smart when you're doing it?"

Karl Weick teaches a need for "mindfulness" that maybe our "mental model" is outdated, but thats a fancy way of saying the same thing. Neither IQ nor will power nor genetics nor training can overcome the ability of people to fool themselves.

Only a wide grid of interlocking people is robust against such vortices of "easy money". And "wide" has to mean diversified, over a wide area of the planet, where some are not within the range of the "obviously" perception-distorting perceptual vortex.

This is a very common phenomenon, but we, as humans, remain in denial or think we are somehow different and immune to it.

No, you won’t catch me,
You old Slithergadee.
You caught the others,
But you wo...

Sources for the Slithagadee.

"The Norton Book of Light
Verse" (page 314)
source.

Tuesday, July 31, 2007

Subliminal and subconsious systems

Then again, we can look "downward" or "within" and see systems with "minds of their own" that control a lot we thought we controlled.

Here's the lead of an article from today's NY Times.

July 31, 2007

Who’s Minding the Mind?

By Benedict Carey

In a recent experiment, psychologists at Yale altered people’s judgments of a stranger by handing them a cup of coffee.

The study participants, college students, had no idea that their social instincts were being deliberately manipulated. On the way to the laboratory, they had bumped into a laboratory assistant, who was holding textbooks, a clipboard, papers and a cup of hot or iced coffee — and asked for a hand with the cup.

That was all it took: The students who held a cup of iced coffee rated a hypothetical person they later read about as being much colder, less social and more selfish than did their fellow students, who had momentarily held a cup of hot java.

Findings like this one, as improbable as they seem, have poured forth in psychological research over the last few years. New studies have found that people tidy up more thoroughly when there’s a faint tang of cleaning liquid in the air; they become more competitive if there’s a briefcase in sight, or more cooperative if they glimpse words like “dependable” and “support” — all without being aware of the change, or what prompted it.

--- wade

Perspectives in Public Health