Since we didn’t go up to Shawnee this weekend as planned, and since most of my Sunday was spent cleaning my office and writing code for the “Big Secret Project” we had some time to discuss a new book that arrived:  Mathematics 1001: Absolutely Everything That Matters About Mathematics in 1001 Bite-Sized Explanations.

Elaine had opened the book to the page (2/3rd’s) of the way into the book in which a simple discussion of the Monty Hall Problem was being discussed among the finer points of Probability and Statistics.

The Wikipedia entry on the Monty Hall Problem runs down the set-up this way:

The Monty Hall problem is a brain teaser, in the form of a probability puzzle (Gruber, Krauss and others), loosely based on the American television game show Let’s Make a Deal and named after its original host, Monty Hall. The problem was originally posed in a letter by Steve Selvin to the American Statistician in 1975 (Selvin 1975a), (Selvin 1975b). It became famous as a question from a reader’s letter quoted in Marilyn vos Savant‘s “Ask Marilyn” column in Parade magazine in 1990 (vos Savant 1990a):

Suppose you’re on a game show, and you’re given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what’s behind the doors, opens another door, say No. 3, which has a goat. He then says to you, “Do you want to pick door No. 2?” Is it to your advantage to switch your choice?

Vos Savant’s response was that the contestant should switch to the other door (vos Savant 1990a). Under the standard assumptions, contestants who switch have a 2/3 chance of winning the car, while contestants who stick to their choice have only a 1/3 chance.

However clear this application of Bayes Theory is, Elaine wasn’t buying it.

To her was of thinking, if the contestant on the television show can now pick either door out of a Universe of two doors, the odds are down to 50-50. 

Of course, that’s not right…switching doors will “win the car” 0.66 of the time.  Not the 50% which would be the case if the contestant just picked from an initial Universe of two doors. 

The contrast in probabilities, a 2/3rd’s chance of winning the car if you switch) versus a 50-50 chance if you look at the problem wrong, brings to light a fascinating aspect of Bayes theories that (extended out to infinity) have some really shocking spiritual implications.

At the core of it is something I can “event-chaining” in real-life.  The concept of “event-chaining” is already well known in computing, it’s just that most of humans are right on the front steps of computer science and haven’t grasped that computers are teaching us about some very subtle aspects of Reality, if we’d only be quiet long enough to pick up on it.

The difference between the host and contestant and two doors, two outcomes being a 50-50 and a host and contestant grappling with three doors is just this little matter of event-chaining which is not well-described in spiritual matters.

Chains matter immensely, however.

Accident chains, specifically:  And there’s a little form you can use to see how what people do results in “accidents” but this is almost always a series of chained events.  Which gets us back to the Monty Hall Problem in statistics.

Accident-chains are very big in aeronautics, too, by the way.

The usefulness of Bayes is that it views the world (even after Monty opens a door) as still being part of an event-chain.  The choice problem does not “reframe” just because it now looks like a two factor two-door choice.

So in addition to everything else you do this morning, on your way to work, see what happens when you go through the implications of this statement:

“If by opening a door, the Monty Hall Problem results in a pro-change shift of adds, does that mean that other factors in Life may be working the same way in my life?

Or, as I got to on Saturday…

“Am I facing a Bayes choice problem because I am fighting a Firewire from hell problem in my studio while I have the Secret Project still pending?  Is Universe trying to bias me (my activity choices) from my natural inclination to do one thing (fix the damn Firewire problem) before doing the other (finish the Secret Project Server mods)?”

I decided (since Universe wasn’t budging on the Firewire problem) that I’d move to the Linux problem (hairy Squid proxy issues related to mixing content from eth0 and wlan1 in a secure way.

I should know in a week, or less how this will work out, but in the meantime, it’s yet another one of those “off moments in Life of George” when I frame something up (Universe shoving me this way or that) and the next day, UPS has left us a book which we happen to open and which happens to frame the Monty Hall problem and that happens to deal with how this Universe pushes topic.

So the ponder is (if Elaine and my sensibilities about reframing aren’t correct) Just how many discrete chain-steps removed are we from the set-up for the game of Life?

And then (depending on how far back you can see Bayes at work) is there any probability or is Free Will really not more of an illusion that we previously have been led to believe.

Or (weirder still) is this just a further hint verging on mathematical evidence that Life is a Big Game and we are nothing more than The Bayesian Blind” not being able to see back up the causative chains far enough in real-time “play” to really grasp more personal control over the Outcome of the Game?

I wrote this on Sunday immediately before firing up the Linux server.  I’ll make a note in a few hours on how programming went (sparing you the details).  The question before me is “Is finishing the Linux project a key “event-chain” that needs to be done right now?

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We’re not big on spending money foolishly, but the net is afire with crazy talk about Ebola, risks, and what people are planning to actually do about it.

Therefore, this morning we will go through the basic systems of Life (all seven of them) and work though a common-sense prepping plan – one that we put into operation on Wednesday when the word of the confirmed case in Dallas was making the rounds.

What we’ll focus on today is the concept of “dual use.”  In other words, what are the disease isolation tools that you will have use for no matter what and what future purchases that you’ll need in the coming year, or two, can be moved up to present day purchases?

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Before we get into our usual dose of economic news and trying to make a buck in a world-gone-mad, we should begin with a huge WTF for CDC officials.

As you can see in this video from YouTube, it appears that unprotected workers were involved in washing down the sidewalk outside the residence in Dallas where Patient Zero was; a sidewalk where  P-0 had reportedly puked…

This is getting huge traction on the net this morning as people are asking what is going on?

Oh, and the apartment sanitizing crew for the apartment has been turned away reports CNN.

While the TV talking-heads are assuring us that all is OK with this, we offer this extract from the Public Health Agency of Canada which has a useful summary of Ebola data here.

PHYSICAL INACTIVATION: Ebola are moderately thermolabile and can be inactivated by heating for 30 minutes to 60 minutes at 60°C, boiling for 5 minutes, or gamma irradiation (1.2 x106 rads to 1.27 x106 rads) combined with 1% glutaraldehyde ^{Footnote 10 Footnote 48 Footnote 50}. Ebolavirus has also been determined to be moderately sensitive to UVC radiation ^{Footnote 51}.

SURVIVAL OUTSIDE HOST: Filoviruses have been reported capable to survive for weeks in blood and can also survive on contaminated surfaces, particularly at low temperatures (4°C) ^{Footnote 52 Footnote 61}. One study could not recover any Ebolavirus from experimentally contaminated surfaces (plastic, metal or glass) at room temperature ^{Footnote 61}.  In another study, Ebolavirus dried onto glass, polymeric silicone rubber, or painted aluminum alloy is able to survive in the dark for several hours under ambient conditions (between 20 and 250C and 30–40% relative humidity) (amount of virus reduced to 37% after 15.4 hours), but is less stable than some other viral hemorrhagic fevers (Lassa) ^{Footnote 53}. When dried in tissue culture media onto glass and stored at 4 °C, Zaire ebolavirus survived for over 50 days ^{Footnote 61}. This information is based on experimental findings only and not based on observations in nature. This information is intended to be used to support local risk assessments in a laboratory setting.

A study on transmission of ebolavirus from fomites in an isolation ward concludes that the risk of transmission is low when recommended infection control guidelines for viral hemorrhagic fevers are followed ^{Footnote 64}. Infection control protocols included decontamination of floors with 0.5% bleach daily and decontamination of visibly contaminated surfaces with 0.05% bleach as necessary.

I will let you make up your own mind based on the data from a source believed reliable.  (If you can’t trust Canada, who can you trust?)

All of which gets us around to the next shocker:  We’ve learned from a non-federal government source that there are only two labs currently testing Ebola samples.  One is the State health department lab in Austin and the other is at CDC headquarters.

This official (in  a comparably-sized city to Dallas) tells me officials are trying to decide if they should set up local testing in his city.  There are two sides to it:  CDFC wants to maintain control on the one hand, but if that adds time-delay into the mix, then that’s a serious thing.

And, as mentioned yesterday, CDC was real “late to the party” getting training materials out to US hospitals; October 1 when we’ve known it’s coming seems inexcusable.

Meantime, the WaPo reports that four people have been quarantined and over 100 may have had contact withy P-0.

And if the training screw-up and wash-down questions aren’t bad enough, the CDC chief is supporting the corporate line when he says “We can’t shut down borders.”

And that is another pant load of crap.  Of course we can shut down all our borders, it’s just that we’re such a lazy-ass weak-willed, corp-whipped, sissified country we don’t have the will to do what’s needed.  Political correctness rules the Ebola response…

Which is why I am pessimistic on future prospects.  I’ll bite my public tongue…

Here’s a source for the plane flight trips patient-zero was on.  This should have been out on the 28th, but don’t let me get started on how slow information kills in situations like this.

Our Peoplenomics.com report tomorrow is “Ebola Prepperdemic: Keeping Ahead of the Curve.”  More than anything, we’re focused on how to minimize contact and getting ready for possible isolation.

    

About That Jobs Report

The market was already primed to open up 70 points before the jobs report came out…so here’s what the investor community was looking for:

Total nonfarm payroll employment increased by 248,000 in September, and the unemployment rate declined to 5.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, retail trade, and health care. Household Survey Data In September, the unemployment rate declined by 0.2 percentage point to 5.9 percent.

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Please accept this in lieu of our usual “Coping” section this morning.  This is more the flavor of a Peoplenomics report, but since we are doing through Ebola trigger points and preps in tomorrow’s report, I wanted to share some perspective on what’s ahead for the economy.

The value of the old Beechcrate is showing up this weekend as we’re going to pop up to Oklahoma to spend some time with Robin (and Mrs.) Landry.

I appreciate you don’t give a rip about my comings and goings (except that it it interesting that the trip with tail wind tomorrow morning should clock in at 1:53 of flying versus about 6-hours for driving).

What you like do care about is the reason. 

Both in our Peoplenomics charts and in Robin’s extensive work using both Elliott wave counts and regression channels, the stock market is in an extremely precarious position.

We both has a very good handle on the “long wave” elements of it.  Here, the short version is that a collapse into a 1930’s-style event looms larger than life.  It’s just a matter of identifying what the “nominal” cause will be.

As explained in yesterday’s column, there’s been no appreciable dialing-back of debt, just more promises and cross-insurance to keep things from falling apart.

So the focus of this weekend’s working session is “When?”

There are two general cases:  One is a continuing “muddle through” where we slog along until the Fed bumps up rates a tiny bit (they’ve been yammering about how this has got to be coming for months, now). 

Under this scenario, we have a decline here (1,900 on the S&P?) and it possibly could decline to as low as 1,740.  If that’s how coming months work out, then we would expect there to be one more absolute hum-dinger of a blow-off top.

That’s the best case.

The worst case is what happens if the markets continue to slide and wipe out critical support at 1,740 on the S&P.

If THAT comes around, we’ll be in a  position of having all the modern risks of pandemic disease at the same time as we get a mega-collapse and replay of the Great Depression of 1929-1941.

This latter case is interesting because of the “mood control” of the last Depression.  Remember, The Communications Act of 1934 was how government made sure that corporate (responsible/compliant control) of mass media of the time (radio) would play out.

However you want to characterize it, the result of government machinations during the Great Depression was the wholesale distribution of Keynesian Theory which today would be more properly labeled “corpgov” based on what we know.

The Great Depression brought with it an opportunity to enact sensible concentration of wealth programs to prevent the cyclical collapse which stands before us, either sooner, or later.

This happens because in a Great Depression, the One Percent are mostly wiped out.  They have spent almost 50-years accumulating wealth.  But it has cost us dearly, in that working people’s share of income has fallen to fund those at the top.

A good discussion of socialism’s resurgence in the 1930’s may be found over here, and in many ways it parallels the activist climate of today.  Which is being managed and manipulated, if case you hadn’t noticed.

Naturally, socialism isn’t the answer, but then again, neither is ultra-capitalism – those policies that allow capital to accrue in the hands of the very few.  It is the cyclical re-accumulation of wealth that triggers collapse as when working people wake up and demand part of their due in the face of deteriorating personal balance sheets that revolutionary talk arises.

I note that Marx and the other “great socialists” were offspring of upper strata families and didn’t have a real hands-on knowledge of work.

“Karl’s father, as a child known as Herschel, was the first in the line to receive a secular education; he became a lawyer and lived a relatively wealthy and middle-class existence, with his family owning a number of Moselle vineyards. Prior to his son’s birth, and to escape the constraints of anti-semitic legislation, Herschel converted from Judaism to the Protestant Christian denomination of Lutheranism, the predominant sect in Germany and Prussia at the time, taking on the German forename of Heinrich over the Yiddish Herschel.^[“

Young Karl was privately educated, by Heinrich Marx, until 1830, when he entered Trier High School, whose headmaster, Hugo Wyttenbach, was a friend of his father. By employing many liberal humanists as teachers, Wyttenbach incurred the anger of the local conservative government. Subsequently, police raided the school in 1832, and discovered that literature espousing political liberalism was being distributed among the students. Considering the distribution of such material a seditious act, the authorities instituted reforms and replaced several staff during Marx’s attendance

Marx skipped military service and after a seven-year engagement married a baroness.

His cohort, Frederich Engels was another one who didn’t do well at real work:

At 17 years of age, young Frederick had dropped out of high school due to family circumstances. He spent a year in Barmen. In 1838, his father sent the young man to work as a nonsalaried office clerk at a commercial house in Bremen.^[6][7] His parents expected that he would follow his father into a career in business. His revolutionary activities disappointed them

In 1841, Engels joined the Prussian Army as a member of the Household Artillery. He was assigned to Berlin, where he attended university lectures and began to associate with groups of Young Hegelians.

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Reader Notes: 

1.  Under more Normal circumstances, this depth of material would be for our Peoplenomics.com subscribers only.  But, because of the urgent and general nature of this material, it is being shared “in the open,”  If you share, please send a link to this page rather than copy-pasting so that we benefit in some small way.

2.  The Peoplenomics report for this weekend will be based on the follow descriptive narrative and will attempt to plot a reasonable expectation set for both corporate strategic planners and regular people through what’s shaping up as a possible “shit storm to come.”

In our forward contingency planning, we have expected for several weeks now that the Stock Market would be feeling serious impacts of the outbreak, particularly when an “in the wild” case shows up in the United States; which is now has.

What made the Ebola coverage Wednesday so interesting was it caught up to the headline I posted September 22 “When Will Ebola “Infect” the Markets?”

We now know that Wednesday, October 1, was the correct answer.  Airline stocks were down almost 3% and it’s this  that causes us to look further into the rolling impacts of the Ebola event because from a long wave economics perspective, this comes at a terribly inopportune time.

It’s inopportune because in the 48-64 economic long wave we usually see a deep bottoming out of interest rates that mark the bottom being in.  From there, the usual course of events is for a trough war to occur, such as World War Two that really ended the Great Depression. 

A study of history shows how clear this relationship between peak and trough wars is.  Most Americans don’t think much about the length of Great Depressions, though, because they are generally treated as one-off events as though of minimal persistence.

The Great Depression, like its precedents, however, was not a single-year event.  What most remember from school (if anything) was the Crash of 1929 and that’s that.  Yet a closer study of the data suggests that the initial bottoming period didn’t occur until 1932-34.  More significant is that after a period of a few years of “recovery” the Nation slipped into a further Depression.  This was the secondary depression of 1937 that persisted until war spending cranked up in preparation for the Second World War.

With such a clear history available, therefore, we can look back at the Great Depression and as an intriguing question:  “What would the Great Depression” have been like if, following the Crash and partial recovery into, oh 1936, or so, have been like if a pandemic had (rather inconveniently) arrived at that moment?

It’s not a trivial question, for sure.  But we do know the secondary depression was real.  And we can model how society would have behaved had the US been in the grips of a pandemic at a time when (as luck would have it) we had tons of raw materials, an under utilized workforce, and a will to fight.

Given that a new Depression likely has begun to unfold with the collapse of the Housing bubble, a fact not-yet recognized widely because of normalcy expectations and the failure of the financial community to resolve the twin issues of excess debt and malinvestment, the country has experienced a remarkable recovery – at least on paper.

In reality, however, while we saw the large pullback in 2008-2009, there has been no fundamental resolution of the excess debt issue.  In fact, in the most recent report on derivative operations, the Office of the Comptroller of the Currency’s office reports we’re in about the same net credit exposure position as we were leading up to the Housing collapse:

“ Credit exposure from derivatives decreased in the first quarter. Net current credit exposure (NCCE) fell 6%, or $19 billion, to $279 billion, the lowest level since the third quarter of 2007.”

Since the system of continuous settlement, the workaround for counterparty risk causing global lockup, as nearly happened with the Herstatt Event, worked well (all things considered), prior to the Ebola arrival we might have expected a series of “bumping along” until another collapse came along circa 2016-2017 as the underlying problems haven’t been addressed.

Ebola may change that.

In order to really recover from an economic setback, at some level you have to spread the wealth out from the One Percent back to the 99’ers.  The reason is obvious:  The One Percent simply cannot consume enough goods and services to drive recovery.

Working people need to have dreams and aspirations.

Unfortunately, these were already fading going into Ebola and it was on the verge of swinging the economic pendulum back to the right which might have, all else being equal, given the GOP a chance to regain the Senate.

The New Economic Reality emerging is that there will be little to no real recovery in terms of the crucial working people (Middle Class) for a multiplicity of reasons:

• There is a well-documented  decline in the number of jobs available because of factory automation.  This keeps worker wages low and drives people into the Service Industry.  For this reason, Gross Domestic Product calculations are likely to be further jiggered in order to count more service jobs.  This results in increased circularity (shop-keeper economy) risk and places greater reliance on the public mood.
• Further, the coming (marginally “legal”) Executive Amnesty program that will foallow the elections this fall shows a terrible lack of economic sophistication by the Washington Cartel.  Simply: The more low-paid illegal foreign workers we have in America, the slower the economic recovery of the Middle Class wage earners.  In other words, Immigration Reform really means lower-cost workers bidding for jobs and that doesn’t spread out wealth or raise prevailing general wage levels.  Scarcity builds price while excess supplies always kills pricing power.  Ugly as it is to allege, the likely impact of mass amnesty will be to continue the trend toward concentration of wealth.  Thus, it benefits the corporate ownership class (the One Percent) but not working people as purported in by the 6CorpPress.
• Then we have the rolling “topping” of debt, as mentioned above.  Lenders have yet to feel any real “pain and suffering” yet the Middle Class has plenty and is willing to share.
• And these contexts are against the backdrop of cyclical (trough) warfare that we forecast  in the 2017-2025 period without any stretch>  This is because by then the bankruptcy of this whole fracking business will be passing, leaving in its wake the problems of a society that has become overly dependent on cheap energy.  The major powers are still in the ramp-up of the Manufacturer’s Resource Wars.  If you like how global devolution has been rolling here lately, you ain’t seen nothing yet.

This was our playing field before Ebola shows up as a multispectral trend accelerant.  Let’s consider what Ebola does: 

Over the course of the roughly three or four years the disease is likely to run, we will probably see a death toll globally that could run in the 600-million range, plus or minus 200 million.

This figure in imprecise because of the variability in re-infection rates (RO) and these will in turn drift around because of how policy works.

Put your worst visions of the Black Plague and Great Depression in a blender and press the start button:  That’s the reasonable 3-year planning model.

My tax attorney/CPA/consigliore has been incredibly details in his forecasting effort and he’s been generous enough to share his detail work:

“George,

I did an analysis of the potential for Ebola infection and  deaths.  This analysis had two huge assumptions, neither of which may happen:

1)  The outbreaks reaches Lagos Nigeria and begins to run badly there – if it does that it WILL spread worldwide

2)  That physical containments on it’s spread, via Trade Restrictions and Travel Restrictions are reasonably effective at slowing it’s spread and also assist in bring down the RO.

This is NOT a worst case scenario.  This is a REASONABLE scenario IF it breaks out of it’s current “Hot Zone” into the greater populous of heavily populated 3rd world areas (particularly the mega slums).
————————————————————————
EBOLA Infection and Timing  (Revised Sept 23, 2014)
For “Informational Purposes” I am going to roll forward my Ebola Projections using the following assumptions:
(this is more sophisticated than a straight line calculation and is to be adjusted as needed as actual information becomes available):

Assumptions
All RO’s are per infection cycle which is stipulated as 21 days. In () will be the approximate monthly rate.  Additionally the RO’s are calculated off of those LIVING vs.

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Now we know what “the Dallas Meme” that’s been rising in our futuring work was all about, don’t we?

We don’t make many predictions around here but when we do, it may be a good idea to take them seriously.  On August 29th, for example, we discussed the “Dallas Meme” as it related to terror.  This morning we are looking at the first “wild” Ebola case being treated in a Dallas hospital and if that isn’t “terrifying,”  I don’t know what is. 

Moreover, in the August 26 discussion of “Frontiers of Futuring, the Dallas Hit” we covered the www.nationaldreamcenter.com predictive headline that forecast an event:

““Chaos ensues in Dallas in wake of …Bomb threat at Dallas/Ft Worth Interntl Airport.”

We got the right city – and the air travel link, OK…but it’s here that we come back to an old problem of futuring:  We can exact some aspects of the Future, but many specifics get swamped by current contexts.  In other words, language at the archetypical level is ambiguous and provides for multiple futures until that last quantum instant before realization.

But before we get into the guts of this morning’s report, a couple of hearty congratulatory “Atta Boys to our colleagues Chris McCleary of the National Dream Center and to chief programmer Grady of our www.nostracodeus.com project for getting the location and aspects of Dallas right. 

We seen plenty of historical examples of how when government says “Don’t worry!” it’s exactly the right time to worry and to begin prepping for contingencies should government’s best laid plans fail to work out as promised.  Future history will disclose if that’s the case again….

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Check back at 8:20 AM Central for the latest Housing data.

A look at the calendar is all it takes to figure out what will (likely) happen today and through the balance of the week in markets:

The Dow and other indices should post small rises today as this is the end of Q3 and we usually expect to see window-dressing, which in this case may be holding us up.

After about mid-day today, after the bonuses are safe for the fund managers I wouldn’t be surprised to see the market decline resume in earnest along about tomorrow, or maybe Thursday.

Take a look at China’s Hang Seng:  The judgment test of the day is this:  How much of the more than 5% decline in China has been due to demonstrations and how much is due to economic prospects declining? 

Or, is that a bellwether for the West?

For their part, Hong Kong protesters have issued a deadline to China on a set of demands – about the dumbest move possible.  China could give a rip and knows how to use overwhelming force.

You notice how the US is silent on this pro-democracy stuff? We preach at the little countries and happily bomb away, but when comes to a country that is (in effect) our “dealer” – well, no harm, no foul, right?  You don’t diss your dealer…

Gold is hovering about $30 bucks over its 52-week low and that brings up the idea of more deflation in the pipeline.  Should gold continue weak then it will fall to housing prices to save the day – something that isn’t terribly likely, as I see it.

Massive market declines need a cause, but talking to Robin Landry yesterday he reminded me of an old market truism: “ Market capitulation and collapse doesn’t happen at the TOP…”

Over the next week, or so, that might be extremely valuable advice to remember, even if it seems a bit scary…

How Much Surprise was ISIS?  No, Really…

According to the Government Accountability Institute, the Golfer In Chief has attended less than half of the daily intelligence briefings prepared for his review.  A snip from the report Summary…

In September 2014, the Government Accountability Institute updated an analysis of how much time President Barack Obama has spent attending his Presidential Daily Briefs (PDBs), as recorded on the White House official calendar and Politico’s comprehensive calendar.

The updated study covered the president’s first 2,079 days in
office, running from January 20, 2009 through September 29, 2014.

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