The Awesome Science of Chinonomics

Elections are over. SuperPAC's bidding wars for the oval office have ended, marking the beginning of the new electoral cycle. The sheer cost of this year's election and its result prompts many questions. Will the Republicans have to rethink their stance and diversify their reliance on a shrinking white male voter population? Is the personalization of corporations ' influence on elections a pernicious one? Some people might be tempted to rationalize the astronomical figure by downplaying it. "America spends more on Halloween candy  than on political campaigns." That may be true, but what about the fact that campaign spending has grown 12.4 times faster than overall US population in the last 12 years? People still decided whom to vote for in 2000 with $6/per person spent by political campaigning. This time around they spent $13.34/per person. It is clear that the current election model, coupled with the  mediatization  of  politics, provides incentives for e

"One more round of QE  please. The world economy needs it. I am feeling the withdrawal." That is the market's plea to our MIT-trained monetary Dictator . The market's starvation for the much-needed next QE fix seems to be creating a never-ending game. "The market needs more accommodating monetary policy. We can't allow deflation to set in", the rational goes. The terror of deflation drives Central Bankers around the world into competitive devaluations, pushing everybody else into a self-accelerating monetary easing race that precipitates a monetary flood of epic proportions. USD $2.3 trillion in the United States. GBP £375 billion  in Great Britain. EUR €1.0 trillion in Europe via the ECB's LTRO , just to name a few significant examples. Central Banks around the world are forcibly participating in a game of one-upmanship , the likes of which we have never seen . Central Banks Balance Sheet size has almost tripled in 6 years. Graph by James Bi

Are we all lazy creatures? Some would say we always look for shortcuts to obtain what we want --even in the most disciplined version of ourselves. The path of least resistance defines our every move. The behavior goes deeper than what we see in our penchant to become couch potatoes. The brain also is always looking for ways to do the same tasks in the most efficient (effortless) way possible. Amblyopia  is an example of the brain turning off the visual signal in one eye, choosing to overdevelop the other to compensate the loss of vision in the first one. There have been reported cases of people losing hearing in one ear without any apparent reason while at the same time overdeveloping the other ear. When the brain realizes that it can accomplish the same task with less resources, it appears it decides to shut down redundancies. But what happens when a redundancy in the brain is created by an external agent? Some discovery -fire-, some tool -utensils-, some technology created for the

We live in an unstable world. The probability of what used to be thought as improbable is becoming more and more likely. The old definition of a statistical outlier as a "1 in a 100 years" event has morphed into the now famous " Black Swan " event. Using Didier Sornette 's term, " Dragon Kings " are now becoming more likely. Put it probability distribution terms, the distribution of all possible outcomes is becoming more bimodal (tails are "fatter", as shown in the graph below). It appears that reality is abandoning the familiar Normal probability distribution shape, depriving us of the standard tools we used to rely on to estimate the future. The comfort of saying that there is a 95% probability that an event will be within 2 standard deviations from its mean is gone, leaving analysts and futurologists clueless. Sornette (2011): Scaled Distribution of Runs of Gains (Right) / Losses (Losses) for 30 major US stocks.  Notice the f