Schramm–Loewner evolution

Hero mathematician of the day, Oded Schramm.

In 1999 he moved to the Theory Group at Microsoft Research in Redmond, Washington, where he remained for the rest of his life.

Microsoft stole this guy! He dies in a climbing accident in 2008 and we will miss some great triumphs in theory. This guy cracked the code in the new math, the math of minimally redundant systems. But the lesson is, mathematicians are worth more than their weight in gold, find them, hire them.

I will be talking about his work and how it relates.

He had two partners;

Wendelin Werner (born 23 September 1968) is a German-born French mathematician working in the area of self-avoiding random walks, Schramm-Loewner evolution, and related theories in probability theory and mathematical physics.

and  Gregory Francis Lawler (born July 14, 1955) is an American mathematician working in probability theory and best known for his work since 2000 on the Schramm–Loewner evolution.

The work is important in that it identifies the property of a lattice that defines finite elements conformal to calculus and conserves system properties. Redundancy, is my conjecture, that finite elements which are not martingale, that is retaining a memory of the past requires redundant motion.

I deal with congested systems, optimally congested. Motion is to achieve separation  but the congestion gradient is established by local interaction. As separation increases the separation gradient becomes uncertain, and there is no non-redundant exchange at some point.  That point is the point of optimum congestion. At this equilibrium, elements will operate with their congestion gradients intersecting at some uncertain center which should be minimum phase, or normally distributed . The elements reach a stopping point where movements perpendicular to the local radius are indistinguishable to movements along the radius. The elements are at maximum entropy and the uncertainty is fixed to the Fine Structure constant; and the curvature of the enclosing sphere estimates a rational Pi with optimum error. The system is spherically adiabatic.

The gradient changes as 1/r, r measured from a probable center. Hence the system must quantize motion along r and angle to maintain the martingale condition everywhere. Hence the unit almost sphere, otherwise known as particles.

What is t?

Well the only requirement is that it be a variable globally known and is not x. Most likely is is the unit of uncertainty, a quantization of  the Fine Structure  for the system. It is quantized for minimum redundancy which sub-selects solutions for x. p(t,x) still generates the martingales, within the limits of uncertainty. It is globally known because the minimal unit of the system has it built in.

Economists: The long term unemployed are in Illinois

Economists can't find out where they are! They are the blue line of unemployment. The green is New York for comparison and red is aggregate unemployment. So we see the long term unemployed sitting in Illinois, the fourth largest state in the union and the major transportation hub of America.  Economists can do aggregate regression all they want but the error bars will be enormous when Illinois contains this many long term unemployed.

Why does the major transportation hub of America suffer long term unemployment?

The most immediate answer in the first rise of Apr 2011,  was the day the stimulus drove oil prices back to the moon. The second happens to coincide with another rise in oil prices.  Illinois finally got back on track in Feb of this year folks.  That was when oil prices finally deflated.

The second reason is the pension problems and the resulting taxes needed to cover them.  So we have two major causes, all of them Keynesian in origin. Waddya know? Ya think the Keynesians will actually find the problem? Don't bet on it, they will debate error bars from here until they retire, so forget about any of those bozos finding a thing.

Kevin Drum says White boys done this

JEFFERSON CITY, Mo. (AP) — Missouri Gov. Jay Nixon has declared a state of emergency and activated the National Guard in advance of a grand jury decision about whether a white police officer will be charged in the fatal shooting of a black 18-year-old in the St. Louis suburb of Ferguson.
Nixon said Monday that the National Guard would assist state and local police as needed, in case there is civil unrest when the grand jury's decision is announced.
There was no indication an announcement is imminent. There is no specific date for a decision to be revealed about whether Ferguson Police Officer Darren Wilson should face charges for shooting Michael Brown on Aug. 9. The St. Louis County prosecutor has said he expects the grand jury to reach a decision in mid-to-late November.

Bernadeia says the Black Boys done it.

Daily Caller: Superintendent Bernadeia Johnson told NPR, “I and all of my staff will start to review all non-violent suspensions of students of color, especially black boys, to understand why they’re being suspended so we can help intervene with teachers, student leaders and help give them the targeted support they need for these students.”

Which liberal racist pig are we to believe?

I think Kevin, Bernadeia and Jerry Brown make 250 years of racist pigs in the Democratic Party, that's quite a record.  If you ask them why, the liberals will say, "Its ok for us to racists, we are morally superior". Same excuse we have been hearing from them for 250 years.

Does the racist Eric Holder help out?

No, the Department of Civil Rights says the Black Boys done it and need special help.  He is in charge of official racist policies in DC. Now the FBI issues a memo saying crowds of violent African Americans will likely threaten lives and property.

Los Demócratas están en un concurso para ver quién es el cerdo más racista. Bienvenidos compañeros hispanos para el partido Demócrata de Estados Unidos racista.

The hyperbolic yield curve

I sort of done it on the fly.  Let's look where I was headed:

The outcome I wanted was: 1-tanh(n*a)^2 = balance ratio.

The balance ratio was principal amount deposits over loans. The n was the step size and a, if we use Lucas numbers, is ln(Phi), I think, without looking things up.
The sinh and cosh were rates plus unit balances, for one period. Tanh then was the ratio of deposit flows to loan flows.  1-tanh^2 is the first differential of the flow ratio.

So the idea was that as n stepped up, the flows go to one and the principal balances go to zero. The balance ratio is the ratio that results when a careful economists goes from the weiner equation to the equation above:

For p(x,t) = t*tanh(x), where t was the balance ratio.



Where I left off was wondering what Lucas polynomials divide to make p(x,t), and I have barely looked.  The Lucas numbers generate sinh and cosh alternatively with each step of a.

Why do we care? Because if this equation is true then we know the limits of an optimum monetary zone, that is the balance ratio when it is as close to zero as we can get, which is the fine structure constant in physics, naturally, because nature does sphere packing as an estimation method.

Do economists care if tanh is polynomial? Not at first, they should figure the rest out themselves, I am retiring from estimation theory. I am too lazy or need a vacation, one or the other.

My take on the Japan economy

First, it looks like the five months of 3% inflation was due to the anticipated and then actual consumption tax.  Otherwise, inflation has been in the 1-1.5 range since the crash. Yet the ten year yield on government bonds have been .5%. How in the world do they do consistently negative rates?  Central bank bond buying, evidently. Someone has to take the loss since the rest of the economy needs positive interest rates to support positive growth. And yes indeed the Japanese economy has been going in and out of recession for some time.  Likely Japanese oil importers pay a premium and business lending pays a premium.

Someone selling oil to Japan is going to notice that the Yen loses money over time, so eventually Japan pays a premium in price.

Here we see the price of oil in Yen (blue) and the price of oil in dollars (red).  The conversion factor was based on the Yen/Dollar exchange rate.  But the dollar is still king and the US is still the major Japanese market.  So what we see is what we expect, the real price of oil has been rising for Japan. The result is intermittent recessions in Japan.

So this is the symptom, what is the cause?  Likely the Japanese government is stuck with huge pension payments.

The idea that the government and central bank can fool traders by faking low rates is horse manure, it never happens.  If trade is happening then you can bet that someone is making an accurate yield curve.

Japan makes it official

TOKYO (Reuters) - Japan's economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election just two years after he took office.

Gross domestic product fell at an annualised 1.6 percent pace in the July-September period, after it plunged 7.3 percent in the second quarter following a rise in the national sales tax.

Reinhart-Rogoff, where are you?

Nationwide alert for police forces?

BOSTON -- From Boston to Los Angeles, police departments are bracing for large demonstrations when a grand jury decides whether to indict a white police officer who killed an unarmed black teenager in Ferguson, Missouri.
The St. Louis County grand jury, which has been meeting since Aug. 20, is expected to decide this month whether Officer Darren Wilson is charged with a crime for killing Michael Brown after ordering the 18-year-old and a friend to stop walking in the street on Aug. 9.

So, goes the theory, nationwide large groups of African-Americans will form in protest threatening lives and property.   So who put out the alert? Evidently is was an outburst of preparedness from Boston to Las Vegas.  So we have four or five major police departments preparing in case large groups of African-Americans start threatening lives and property.  Well, let us see if large groups of African-Americans are that stupid, I would think not.

Egad, the vortex!

Accuweather: The coldest air since last winter is set to move over the Plains and the East during the first half of the new week.
The core of the cold air will focus over the northern Plains and the Great Lakes through at least Wednesday with overnight lows dipping down into the teens, and even the single digits in some normally colder spots.

I would say, come to California, but we have no more water.  What a choice, plenty water and cold cold air; or a drought.

Keynesian handwavers are at it again

This time Jack Lew gave a speech on behalf of his handler, Goldman Sachs, requesting more deficit spending from Japan and Europe. Since then the Keynesian handwavers start repeating the line, none of them checking the facts.

Japan with a debt to gdp ratio of 200% has deficited another 42% of GDP since the crash, with nothing to show for the effort.
The USA and UK deficited an equal amount, but only brought debt to gdp up to the 95% level, they show some growth.  But Spain was exactly in line, with an even higher amount of deficiting, 47% of gdp, and small debt to gdp, yet they performed miserably. France, with 92% debt,  was only 1/4 short in the deficiting arena and actually performed better than Japan.  Italy, 132% debt to gdp could do nothing.

Even within the USA, we see the same variance in result, Texas outperforming California consistently by 2%, and Illinois just barely getting out of trouble way late in the game. Yet all states participated in deficiting by DC.

All of the factors effecting growth swamp the deficit spending effect. Perhaps one exception might be Germany with low debt to gdp and low deficiting after the crash.  Once the economic units are broken down to comparable size we find a 2% variance in performance mostly uncorrelated with any deficit spending.

As near as I can tell, none of the handwaver economists actually looked at the data, save one; Simon Lewis in the UK seems to have actually looked. Further, I would claim that very few economists come out of Keynesian school with any data analyis capability what so ever.

  This is the usual typical handwaving by very badly educated economists, most of them in the USA.

Quarter by quarter budgeting in the Swampland

WA Post: Instead of passing a spending bill in the coming days that would fund the government through the end of the fiscal year, Republicans are considering a short-term measure that would expire early next year, according to more than a dozen top lawmakers and their aides who spoke on the condition of anonymity.

A fantastic idea.  Obama would embrace the idea if he had any brains.  Get the lazy Senate off their ass, roll up the sleeves, put on the eye shades and start budgeting quarter by quarter.  They would find short term savings, require less long term funding, move down the yield curve, save on save interest costs and accumulate some working cash.

Especially get those deadbeat affirmative action bimbos from California to start earning their pay.

The curve would straighten out, velocity increase and NGDP would grow by 4% a year.  This is the Bubba Clinton method, embrace it. To Democrats want to spend their time waving the Book and singing glory to DC?  Try being a friggen legislature and executive for once, worthless politicians in DC are a pain in the ass. The California legislature might watch, maybe their IQ will jump above five points for once.