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Here are a few interesting questions. Test your analytic predictive skills!

  • Will the US government fail on its financial obligation in the next 3 weeks? 
  • Will it fail to pay interests on its debt, in the next three months?
  • Who is responsible for the current situation, based on a root-cause analysis?
  • Has managing a government become an impossible task? What would be the solution then?

If really the Obama administration has been consistently spending more money than it collected over several years, I predict that the answer to 1) is yes, and answer to 2) is no. It's possible that both republicans and democrats are actually working on a deal to manage a "controlled implosion" of the US government's debt, which means failing, but in some controlled way. Also, any month with 1,000,000 workers not working also means a $5 billion saving, though this is peanuts compared with the $16 trillion debt.

The question is: will the impact be bad for you? Most people have lost all their trust in the stock market and in the government (I've been out of the stock market since 2000), we know our politicians are liars and incompetent, and they are anything but leaders, so we have become more immune to their tantrums and bad judgement. On their defense, it is now truly impossible to govern any large country - no government of any kind could ever do it successfully over a long time period, as people slowly cluster over time (over hundreds of years) into a few groups that are totally incompatible - Muslims vs. Atheists, democrats vs. republicans etc. with each group willing to control everybody else, believing they know what's good for other people, and willing to impose their rules upon others. Of course, it can't work, unless each group is isolated from all other groups and create a nation of its own.

On a different note, the helpline for Obamacare has the phone number 1-800-318-2596. On any American phone keypad, this is equivalent to 1-800-F*UCKYO (number 1 does not have a letter associated with it, I replaced it with *). What are the chances that such a bad choice is just a coincidence, versus a number definitely chosen on purpose (by a disgruntled contractor, or someone who wanted to have some fun). There are exactly 729 combinations of letters that corresponds to 318-2596, and the vast majority do not correspond to any meaningful word.

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You wrote Politicians are liar. But aren't their lies manufactured by statisticians? Unemployment reports for instance, are compiled by government statisticians. Aren't these statisticians asked to produce numbers that fit with a pre-established political agenda (that is, to make things appear better than they really are). 

Très bien trouvé Vincent, fin et amusant

Dr. Granville:  It's a good thing not everyone is as negative and fatalistic as you are.  Otherwise we would truly be doomed.  

I have a favorite cartoon from The New Yorker magazine:  Three guys at a bar, each with a glass in front of them, and each glass has a beverage line at the vertical midpoint.  First guy is smiling - his glass is labeled "half full" and he is labeled "optimist."  Second guy is frowning.  His glass: "half empty."  He is labeled a pessimist of course.  The third guy is labeled a "pragmatist": He's calling to the bartender:  "Hey, can I get a twist of lime for my drink?"

I try not to bitch about whether or not the glass is half full or half empty.  I try to focus on what the drink could use to make it taste better.

I don't see my predictions / comments as negative (well negative against the government, yes, but not about America or American people - which the government no longer represents). Certainly I did not mean to have my comments interpreted negatively. I'm actually quite optimistic. I did no say doomsday is coming. I mentioned that we could easily survive a government failure, and that the failure, if it happens, would not involve the failure to pay the debt.  In my opinion, the government's "failure" has already happened a while back, very slowly over time like a cancer, and it's old news. I don't see this statement as being negative. Indeed you can't double fail, can you?

I'm not fatalistic, I even created my own country. And somewhat, I have managed, despite all the economic turmoil, to move from the bottom 1% to the top 1% (though I like to tell everyone that I'm not in the 99% nor in the 1%). I managed to escape cubicle life, debts, the rat race, commuting, health insurance and almost all drawbacks of modern life. Believe me, I'm an optimistic, hedonist guy (and pro-choice, anti-gun atheist, just in case you think I 'm a republican - most people think I am). While I do criticize many things (education, health care, etc.) I offer solutions. I will also share my success story when I find the time.

While my comment "I've been out of the stock market since 2000" might look fatalistic, it's one way to look at it: the half-empty bottle. The half-full bottle perspective is that I moved my money out of the stock market, bought a house in California, sold it in 2005 and made money in the real estate when many people lost. In short I made money in the stock market before 2000, I made money in the real estate, and now I make money in a different way. Each time entering and exiting bubbles with almost perfect timing. It's hard to imagine I could be fatalistic, I guess I might appear fatalistic at first glance, but I'm extremely flexible and adaptive, always escaping situations that I feel are too risky and finding new ideas. I'll share my story with people, so it will be helpful to a few.

Of course, not everyone can get into the top 1% club, and in order to enter you have to remove someone who's already in place, and it's very difficult if you are not born in the right family, but it did happen to me despite (or thanks to?) not being born in the right family, in the right country, at the right time. I promise I'll share my experience.

"Most people have lost all their trust in the stock market and in the government.."

"...we know our politicians are liars and incompetent, and they are anything but leaders..."

"...it is now truly impossible to govern any large country - no government of any kind could ever do it successfully over a long time period, as people slowly cluster over time (over hundreds of years) into a few groups that are totally incompatible - Muslims vs. Atheists, democrats vs. republicans etc. with each group willing to control everybody else, believing they know what's good for other people, and willing to impose their rules upon others. Of course, it can't work, unless each group is isolated from all other groups and create a nation of its own..."

Yeah, I guess you're right.  Now that I read your words again, I'm thinking, "Those are surely the words of an optimist."

Also, when views are expressed in broad pronouncements of certitude ("...we know our politicians are liars and incompetent, and they are anything but leaders...") it tends to diminish the forcefulness of the rest of the argument.

Maybe I'm slow on the uptake or failing to grasp subtle nuance, but even your response reinforces the image of an elitist ("share my story with people, so it will be helpful to a few" isolationist ("I even created my own country").

Not that there's anything wrong with that.

 

OK, I am an happy, upbeat pessimistic then. Elitist? When I write that my advice will be useful to a few (as opposed to many), it is because I assume not everyone wants to become like me, only a small minority. 

Frankly, in my opinion, the most superior creatures are those experiencing consistent high levels of happiness. It could be someone poor, someone with a passion, maybe not even a human being.

Regarding creating my own country, if you don't have any hope of ever getting a government that you can tolerate, AND you are not a fatalistic, then there are not many options left. Sure you can launch a revolution, but I'm sure I'd be very bad at managing a large country, worse than the current "leaders". Thus my solution. It might actually evolve to the point where I create a new currency, but unlike Bitcoin, take steps to make sure it is not used by criminals.

I think the government's problem is an addiction problem. Just like alcohol, gambling, sex or other addictions. In this case, it's being spendaholic, spending more than money coming in, and (just like alcoholics) a need to regularly increase the dosage. More money does not solve the problem, it makes it worse. Yes, short term it can eliminate hangover effects, but the short term boost is very short lived.

Would abruptly stopping the money supply cause very dangerous withdrawal symptoms? Possibly - in the case of severe alcoholics, it does and can cause death. So if that's where we are heading (not increasing the debt ceiling) we might need to treat the patient (the government) in some type of emergency care, a kind of rehabilitation program until things no longer seem out of control. 

If a failure is well controlled and coordinated, it could, maybe, result in stock market crashing by 25% in a week, followed by a full recovery the next week. The architects of this artificial failure/recovery would reap trillions of dollars by first shorting the stock market then buying back, knowing perfectly when to sell and buy.

And this relates to Predictive Analytics, how? It is a political opinion with no data to support it. Well, no "big data." There's nothing wrong with that, but you should consider labeling your posts with tags like "This post has nothing to do with Predictive Analytics."

You could say the same thing about predicting the stock market, predicting the efficiency of a drug, or predicting the weather. If the only thing that qualifies as predictive analytics is something coming out of a SAS program, R code or statistical model,  then yes this is not analytics. But I believe that my brain, everyone's brain indeed, is an analytic machine capable of doing analytics, many times, even better than computers.

And when my brain predicts something, it does not mean that I want that thing to happen. It's neutral, unlike many scientific articles posted in various outlets. Such articles are almost always written by people paid to do research (by their institution, through a grant etc.) and frequently follow the sponsor's agenda. That's actually the reason why tenure was created, so that researchers could publish freely without fear of being fired for their opinions. Now, most researchers are not tenured, and this apparent freedom of speech is not what it used to be, if it ever existed.

Anyway, you gave me a great idea: organizing a predictive analytics competition: man versus machine. A lot of folks at Wall Street, with MIT, Princeton and other stats degree, are actually paid to do raw predictive analytics - just using sheer predictive brain power and no computer - to make winning stock trading transactions. I was offered such a  position a while back.

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