Monday, April 19, 2010

More yield curve

My proxy for an aggregate bankers yield curve

Consider log(Yi) dYi. which grows faster on the steep slope. It is this in each of, less than four or five terms, inversed from traditional form. The aggregate attempts to equalize, that value among the finite terms. When the value is measured to a constant accuracy, the channel is treated in real time. It appears in reality as a minimum entropy physical network with primary function of delivering paychecks, and its maximum bandwidth (paychecks per quarter) is limited.

But also the curve has to be within one SNR of a minimum variance spectrum to avoid cycles. Cycle? For example, periodically overbuilding a retirement community, which could happen when the AARP and their Social Security checks meet-up.

So dual constraints. The first wants the economy to economize on the number of stages in the network, its rank. The second wants to minimize inventory variance at each node.

How would I interpret this as government policy?
Congress makes very large, and rare generational promises, but operates thinly in the short term.

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