About Behavioral Economics: Why Hawks Always Win and Doves Always Lose

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The belief in Rational Decision Making has been the focus of Economic Theory for a very long time.

Although everybody knew that Humans are Highly Impulsive and Emotional, Economists based their theoretical models of the Market on a Rational Human Being who is always able to Calculate the best Alternative possible. This Theory is wrong. The Economic Behavior is controlled by the Emotions.

The current economic crisis shows that the old Rational Theory is not applicable and the attention for alternative theories of Economic Behavior is rising. These theories are called Behavioral Economics.

An important paper in the development of behavioral economics was written by Kahneman and Tversky in 1979 (Prospect Theory, Analysis of Decision Under Risk). Kahneman was awarded the 2002 Nobel Prize in Economics for his research in Prospect Theory.

According to Prospect Theory, Humans attach much greater weight to future losses than to future gains related to their personal reference point. When you expect a certain gain in the future and this gain is lower than you expect the gain is experienced as a loss.

Kahmeman and Tversky became the experts on Cognitive Bias. A Bias is a “not-rational” mostly fast response to a stressful situation. In this case the Human System uses old structures (The Reptile Brain) that were created a very long time ago when the human lived in a completely different environment. The Reptile Brain uses many shortcuts to save time.

Social and cognitive psychologists have identified a number of predictable errors in the ways that humans judge situations and evaluate risks. Biases have been documented both in the laboratory and in the real world. For example, people are prone to exaggerating their strengths: About 80 percent of us believe that our driving skills are better than average.

In 2009 Kahneman and Renshon wrote a paper called Hawkish Biases. It is an attempt to unite the many Cognitive Biases into one Model. The model shows that Humans are highly Confused Predators (Hawks).

As a Predator they protect their Territory with every means possible. They are Confused because they are incapable to Observe and Reason about their own behavior and the behavior of others.

Humans need the “Illusion of Control” to sustain their own Identity. Every time something happens they are looking for reasons to believe that they are the Primary Actor in their own context. They don’t want to believe that Other Human Beings are also Active Agents.

If they would believe this was the case their “Unrealistic Optimism” could change into “Realistic Pessimism”. Unrealistic Optimism makes managers, politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes. Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster.

When a Human is Depressed by Realism he Loses his Face and moves down in the Picking Order of the Territory.

Humans believe that every other Human is always capable to see their Weaknesses (“the Illusion of Transparency“) just like they are convinced that the intentions of others are always clear to them (“the Fundamental Attribution Error“). To hide their Weaknesses they have to wear a Mask and Play the Strong Leader of the Pack. They have to Keep Up their Appearances.

dove

Humans base their theory of the other on inferences about historical behavior and completely forget Situational aspects. When a context is hostile the other must be hostile too. When others behave differently from their expectations they suddenly introduce situational factors to sustain their believe system.

Humans need to sustain their believe-system because this system is the foundation of their personality. Their view on the World has to stay constant because when it changes too fast they will get into big psychological problems. When people get older their believe-system becomes very rigid.

Humans value their own possessions much higher as the possessions of others (“The Endowment Effect”). They even consider possible, imaginary, possessions as real possessions if they are convinced there is an easy way to get them.

If they lose a real or imaginary possession they take tremendous risks to get their possessions back (“Risk Seeking in Losses“). People in general don’t like cutting their losses. They’re willing to gamble on in the hope of recovering them.

Humans simply believe that a Hawk always wins the Game and a Dove always loses. What Humans (want to) forget is that they are living in a group and their In-Group and the many Out-Groups contains many Hawks. They need the confidence that they are “the best” to Survive.

The world of the Human Hawk is a world of Competition (Winner takes all) and therefore highly Stressful. The Sad Thing is that the many faces of Stress are the Major Cause of the Cognitive Bias. When Humans relax and reflect they are much more capable to solve a complicated conflict.

The competitive Hawks always fall in the trap of the Prisoners Dilemma and don’t realize that Cooperation, the Win-Win is the only Certain Way to Leave the Prison.

At this moment another Behavioral Economist, Robert Shiller, is getting a lot of attention. Together with the Economic Nobel Prize Winner George Akerlof he wrote the book “Animal Spirits“.

In the book they identify five distinct elements that blur the theory of the Rational Economy. These elements or “animal spirits” are called: confidence, fairness, corruption; money illusion and the reliance on “stories”of others.

The first three have a lot to do with the “hawk“-theory of Kahneman. The Hawks use the Rational System for their own benifit. They Play with the Rules and invent new exiting possibilities to win more than they ever could imagine.

Sometimes they Play Dirty Games to beat their Opponents. The Doves believe the Economic (Rational) Fairy Tales of the Hawks and are unable to understand the Real Value of their Money.

The Money Illusion is caused by Inflation. Inflation happens when prices Rise but the value of the objects that are priced stays the same. Inflation give people the feeling that they are making money but in reality they are losing money.

The Hawks use Inflation to keep the Doves Buying and Investing. They also use the weapon of Inflation to win the war with the other Hawks.

The Majority of the Human Beings are Doves. They believe the Hawks or are afraid of the Hawks. The Doves are the Workers in the Economy and they make it possible for the Hawks to Hunt.

The Hawks provide the Workers with many things to live an easy life until other Hawks start to Attack the Territory. In this case the Hawks need the Workers to fight and win the War.

Sometimes even the Hawks lose their Rational Capacity. They see a Big Win and become Greedy and Vulnerable. If this happens the Territory is open for other Hawks (The Chinese?) to enter and to take over without any problem.

What has Happened?

The Economic System is just like the Weather System a Cyclic System. When the Economic Cycles and the Weather Systems move UP the Hawks have an Easy Time. Their is enough food for all the Hawks. When the System is going Down Competition starts.

The Hawks forgot to look at the patterns. They did not see or believe that the downfall was approaching. They did not take enough stock to survive the Seven Bad Years. Suddenly the Autumn turned into Winter.

At this moment they are regrouping to create a Powerfull Alliance to take from the other Hawks what they need. They don’t care about the Doves. They always believe the Tales they Tell.

They are afraid of the Other Hawks that are outside their Huge Territory and are Prepared to Fight the Wars that are needed. The Doves will believe them as usual.

LINKS

About Prospect Theory and Conflict Resolution

About Economic Cycles

Kahneman/Renshon, Hawkish Biases, 2009

A Very Long List of Cognitive Biases

About the Prisoner Dilemma in Foreign Policy

An Abstract of the Book Animal Spirits

How the Chinese Networks are Conquering the World

A Review of the book Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof and Robert J. Shiller by Benjamin Friedman

About Very Long Term Cycles

Kondratiev did not look at very long term waves that span many generations. He also did not realize that the Kondratiev-Wave contains a Fractal pattern, the fractal of the Seasons.

A fractal-pattern repeats itself on many levels with different periodicity. If you understand the fractal pattern, the levels and the frequencies of the Harmonic Universe, it becomes very easy to predict the short and long term future. According to Kondratiev the Depression will end around 2012.

The harmonic levels interfere, creating resonances or overtones. The self-referencing harmonic structure of the Universe can be seen in Nature, Music (the Music of the Spheres) and Colours (The Seven Rays).

One of the most important cycles for this moment is not the Kondratiev but the Precession. It is a very long time cycle with a periodicity of about 25.000 years.

The Cycle played a very important role in Astrology. The precession predicts a very important transformation around 2012. This transformation coincides with the start of the Spring Phase in the Kondratiev Cycle.

Around 2012 the Very Long Term Precession Cycle synchronizes or conjuncts with the “long term” Kondratiev Cycle. The Cycles are “added up”. Around 2012 we will experience a Giant Jump into the State of the Imagination and Creation.

Another very Long Term Cycle is the Cycle of Culture. This Cycle has a periodicity of 1250 years. Strangely enough this cycle also moves into the Spring-State around 2012.

The coming Spring-state in 2012 will start with an Innovation the World has never seen before.

The states of the cycles, the Seasons, are related to “Themes” or “Meta Narratives” (Myths). The old Magi, the Astrologers, used these themes to explain what would happen to the layman.

They projected the Story of the Precession on the Movement of the Stars and the Constellations. The Story of the Precession, the Zodiac, can be found in many myths in many cultures. If you understand the Myths of the Zodiac you know what will happen on the very long term and why it is happening.

The same Meta-Stories, written in the language and the metaphors of the Middle Ages, were later projected in the Cathedrals of the Masons. If you walk the labyrinth you will be guided through all the stages.

The meta-stories always appear in literature, art and in our time in Movies and Games. The Theme of the current Season is easily identified when you understand the Meta-Patterns.

Michael Bahktin found the meta-patterns (Chronotopes) of the Magi in literature and Joseph Campbell found the same Meta-Narratives when he researched ancient Myths.

He called the meta-patterns the Hero with a Thousand Faces. What is going to happen in the Short Term is visible in your Dreams. Jung has spent all his life to find the pattern behind dreams (The Archetypes). The Archetypes can be easily mapped to the meta-patterns of the Hero, the Chronotope and the Zodiac.

When you reflect about your dreams, the movies you like or are afraid of, the books you read, the paintings you paint, the poems you write and even about the “slips of the tongue” you know what is going to happen in the short term. Your Unconsciousness knows everything and the only thing to do is find the key to understand what it is telling you.

The theme of the Quest for the Grail, the Infinite Resource, is the theme of our Time. This theme is not a coincidence. Coincidences (signs and signifiers) are also not happening for nothing. They are trying to tell us something. The Western Mind has lost its focus on Signs, Dreams and Coincidences. They are funny or interesting stuff to talk about. I advice you to take them seriously because the Winter of Kondratiev in combination with all the other conjunctions will finally force you to accept a World behind the World you are Seeing.

The World behind the World is already known by the Physicist. They understand that the World is a Self-Reference, a Fractal. They also know that Linear Time is an Illusion and that there are many Universes. These Universes are now highly mixing with our own Material Universe.

This happens when major waves conjunct. Suddenly people start to communicate with Ghosts, talk with Trees, are aware of Extra Terrestrials and have strange feelings about being in different times in history at the same place. Believe me You are not getting Crazy! You are moving like every Soul on Earth into the Great Conjunction.

The Cycle of Culture repeats itself just like the Kondratiev. We are not only going to repeat the Great Depression (Kondratiev) and the Phase of Aquarius (Precession). We are also repeating the Dark Middle Ages (2008-1250=758). Don’t you think our Time has a lot in common with this phase in Western History? It is not difficult to detect the new Witch-hunters (the Inquisition), the new Crusades (Iraq, Afghanistan), the new Plague (Aids) and the new global warming (The Medieval Warmth Period).

About the Spiral of Time

About the Kondratiev

About Joseph Campbell

About Bahktin

About the Middle Ages

About the Renaissance

About the Industrial Revolution

How to get Very Rich during a Depression

The Kondratiev Wave predicts the long term behavior of the Economy. If you look at the Kondratiev Wave, the next stage after the Depression (Winter) is called Spring. Spring is the Time of the Seeds (new Ideas). They where harvested in Autumn. During the time of the Winter the seeds are dormant.

When the Harvest was rich, Winter is a time of Contemplation and Rest. Nature hibernates. Plants, Trees and many Animals sleep and are in the state of the Unconsciousness. When the Harvest was poor, Winter is a time of big trouble.

There will be shortages of Food and Fuel. When the Harvest was poor Winter is a time of Social Unrest and even Social Conflict. During the Kondratiev Winter Big Wars are fought and the Dark Side of the Unconscioussness shows itself in the extreme rise of Psychological Problems (Stress, Addictions, Paranoid) and Dark Religious Movements.

During Winter Shares, Paper money and other Imaginary forms of Wealth are worthless. When you want to buy something you have to deliver real value (Cash, Gold, Silver).

It is very clear that You can Make Big Money during a cold winter when you have gathered a huge pile of primary commodities (“raw materials”). During Winter raw materials are exchanged for other raw materials. When you don’t have access to these materials the only thing that is left for you is Charity.

When you are the owner of raw materials and you are making a lot of money you are Making Use of the Situation. During a cold winter you have to give to the poor and the sick. To make it very clear Making Big Money during a Depression is a Crime.

When you are Rich you can accumulate Social Value by giving away your Material Wealth to Others. During a Depression Material Wealth has to be transformed into Social Wealth to prevent a Social Conflict. This investment will pay back with a lot of social interest during Spring and Summer.

Unconditional Giving, Charity,  is a very old fashioned concept. At this moment we “give” a loan and we “ask”  interest but “giving and asking” are really “demanding”. We want to make sure that what we give will be returned in the same state. More Money for Money, an Two Eyes for an One Eye.

When we don’t want to deepen the down path of the Depression we have to leave behind the Behavior of the Expansion phase of the Cycle, Summer. When the Economy expands it is “easy” to accumulate Wealth. Loans and interest are helpful to bridge a temporary dip in the flow of cash. Summer is a time of fast moving Ups and Downs in the Economy (Recessions).

It is not strange that we are copying the behavior of the Summer. Long Term Cycles just like very fast moving Cycles are not noticed by the Human. They are generational. The pattern repeats every 50 to 60 year so the people that must be Aware of the current situation are Old. They are the grandmothers and the grandfathers, the older people (>75).

Moving through a Depression needs Wisdom and a Long Term View. A Depression is the time to Listen to the Older Generation. Hopefully they have Learned from their Mistakes at that time.

LINK

About the Kondratiev

Why a Depression Takes Thirteen Years

The start and the end of the current depression was predicted a very long time (1922) ago by Nikolai Kondratiev. The Kondratiev Cycle is an economic cycle which lasts between 50 to 60 years.

Kondratiev predicted that the current Depression will start in 2000 and end around 13 years later. Kondratiev used the Seasons to name the phases of his Cycle. We are now in the phase of the Kondratiev Winter.

Spring is marked by economic expansion. Savings are at fairly high levels, and interest rates are low. Stocks and real estate are the most successful investments.

Summer is marked by high inflation, high interest rates and by volatility. Commodities, gold, and real estate do well during the summer.

Autumn is the happiest phase of the Cycle. This phase started about 1982 and ended around 2000. During Autumn paper financial investments like stocks and bonds always do best. It is characterized by speculative bubbles or manias in stocks, bonds, real estate, and collectibles. On the other hand, gold, silver, and commodities collapse. Unfortunately, the Autumn is also marked by a serious decrease in savings, and a dangerous and reckless increase in debt. The imbalances build up to the point where they cannot continue. That’s where we are now.

When Winter arrives the insane excesses of the Autumn are purged and cleansed. The ultimate result is a deflationary recession or depression. Debt is repudiated. There is usually a banking crisis. Bankruptcies and foreclosures increase, as does social discontent. During the Kondratiev Winter, gold and cash are the best investments.

It is very strange that almost nobody believes the Kondratiev Cycle is a tool to predict the Economy. If people would have believed the Cycle it would be very simple to move through the Depression. In the UP-state you have to save money to sustain the DOWN-state. When you don’t do this the DOWN-state will bring you in to big trouble. At this moment the World has used almost all his resources. We have saved almost nothing to move through the deep recession.

In 1931 the US Department of Commerce assigned Edward Dewey the task of discovering the cause and underlying dynamics of the Great Depression. The US Government created a special institute the Foundation for the Study of Economic Cycles. The US Government never took the research of the Institute for granted or used it for another purpose (Financial Warfare?).

The most interesting observation of Dewey is that Cycles restore themselves all the time and Cycles are influenced by other Cycles. They are entrained. We are not talking about a single isolated Economic cycle. The Universe is an Integrated Harmonic System. The Universe is a Wave that generates Waves that generates Waves. At this moment Physicists believe this is the case (String Theory, Plasma Theory).

To me it is unbelievable that Economists like Milton Friedman called the ongoing statistical research of Dewey and many related Cycle theorists “not scientific“. To me it is also unbelievable that almost nobody takes even a look at the enormous amount of data that is gathered. I believe ignoring the scientific facts of the Cycles is not only stupid but also a crime. It is a crime because by constantly ignoring and pushing the cycles the whole harmonic system (including your Body, the Weather, Society, Earth) gets out of balance.

The Cycle of Kondratiev is a “long-term” cycle but there are cycles with a much longer periodicity (The Precession). The “short-term” cycles of the Kondratiev Ride The Wave of the Very long term cycles. If a very long term cycle moves down the Kondratiev also moves down much deeper and much faster.

This is happening and we are totally not prepared to cope with the new phases of the “dominant” long term cycles. The Harmonic System is preparing to Jump to a new State of Balance. This State has been given many names like Time Wave Zero (Terrence McKenna) and Point Omega (Teilhard de Chardin).

In the old age the Scientists who studied the cycles were called Astrologers. They have gathered a lot of data about the Cycles. Just like Milton Friedman we think Astrology is not scientific but many people just ignore that we are now equipped with much better tools and theories to explain what is happening. The old Astrologers did a spectacular job without computers, telescopes and a highly developed mathematics.

If you read the Predictions of the Old Astrologers like The Maya and The Magi you have to understand that they wrote in the language and the metaphors of their time but their message is the same message McKenna and other Cycle-Theorist want to tell.

LINKS

About the Kondratiev Wave

The Case for Cycles, R.Dewey

About the Cycle of the Climate

About the Cycle of History

About  the Cycle of the Seasons

About the Very Long Cycle Theory of Terrence McKenna

About the Transformation Phase of the Cycle

About the End of the Stock Market (6-10-2008).

The Amsterdam Stock Exchange was the first stock exchange to introduce continuous trade in the early 17th century. The Dutch pioneered short selling and every other “modern” instrument. Until the sixties Government and the Big Companies were controlled by about 200 Rich Dutch Families (including the Royal Family). They controlled Society and took care of Stability.

In the 17th century the Dutch East India Company (VOC) was introduced by the Dutch Government. The VOC was the first multinational in the world and the first company to issue stock. It was the first mega corporation possessing quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies.

In the 17th century about 200 families, the so called Regenten, were in control of the Netherlands. The families promoted their members in every influential position available.

The Democracy of the Netherlands was in reality an Oligarchy. The “oligarchic way” of decision making, the Dutch Polder Model, is still the most important way to reach consensus in the Netherlands. Everything happens “behind closed doors”.

Until 1917 only the Rich people were allowed to Vote. The Rich Voted with their Money. In the beginning of the 20th century (1917) the universal suffrage for male citizens was introduced in the Netherlands. Two years later (1919) the female part of the country followed.

The Rich not only voted with their money they were also the most important owners of the Stocks. With the power of their stock and their money they helped their families to acquire important positions in the State and the Companies.

Until the Sixties the Rich maintained a very powerful social network based on reciprocity in the Netherlands. This network was not a local network. It was an international network. The influential Dutch Families were connected to comparable networks all over the world.

Around the Seventies the power of the Rich Families went down. They lost their influence in Parliament and in the Companies. The Flower Power Generation took over the Power at every Level of Society. After some time most of them lost their Ideals of Peace and Harmony.

They started to buy houses and shares and were helped by the Rising of the Economic Kondratiev Cycle. In contrary to the Regenten the Baby Boomers acted on their own. They were very Individualistic and never created a Social Network that could support Society.

Around 2000 the stock market started to vibrate and to go down. The same happened in politics. Many voters are now moving from party to party.

Who is controlling Society?

At this moment nobody is controlling Society. Society is taking its own course.

Who is controlling the Stock Market?

At this moment nobody is controlling the Stock Market. The Stock Market is taking its own course.

Not only the Stock Exchange but also the Political System and the Weather System are taking their own course.

Is there and end to this all?

I don’t think so.

Why?

We have entered the Downfall of the Kondratiev Cycle. During this Downfall the Old Institutions are destroyed and New Institutions take over the Power. We are in an “In Between State”. In this state everything is On the Move. Everything is Moving Up & Down, Left & Right. What many people don’t see that even the Center is Moving. The State and the Stock Exchange are not able to cope with the excessive amount of Movement.

What will happen at the End of the big Shake Up?

There are two possibilities. The first one is the return to an old center.  My guess is that we will move back to the State of the Renaissance.

The second possibility is “frightening” for many people. We will jump to an unknown state predicted by many Old Civilizations called the Fifth World or the Golden Age.

The Hopis call our time the “The Fourth Age of Man”. According to them the Earth has been wiped clean 3 times already. First by Fire, next by Ice, most recently by the great Flood approximately 11,000-12,000 years ago. We are now entering the last stage of the Fourth Age called “The great day of Purification“. This stage culminates either in total Rebirth or total Annihilation.

The Degree of Violence will be determined by the Degree of Inequity caused among the peoples of the world and in the Balance of Nature. In this crisis Rich and Poor will be forced to struggle as Equals in order to Survive. The beginning of the Fifth World will be heralded by the arrival of a being known as Pahana, or the lost “White Brother“.

If we believe the Prophecy of the Hopi and many other “Spiritual Movements (Gnostics, Sufi’s)” the only way that will save us from total annihilation is the Creation of Balance. We don’t have much time left. The Great day of Purification will happen . At that time the “Lost White Brother” (The Center) will return.

Is it possible to Balance the Financial System?

 Yes, I think so.

The only thing we have to do is to Unite Shareholders, Customers and Workers and give them an Equal Share in a Company. They have to Share the Power, the Profit or Loss, the Spirit and the Soul. They have to become Enthousiastic about What is Happening (Spirit).

They have to take care of Nature and the Other (Soul). If we do this we will recreate the Social Power Network of the Rich on a Different Scale (Earth) with other Participants. If we Help the Other we don’t need a Pension!

I am sure You want to put Your Savings into a Shared Enterprise. I am also sure that You will Never Regain the Money you will invest in Shares at the Stock Exchange. The Era of the Stock Exchange is Gone for Ever.

Why I have Decided to Leave ABN AMRO

I am a customer of ABN AMRO for more than 40 years. Last Friday I received a letter from ABN AMRO. They told me that the local branch office of ABN AMRO will be closed and integrated into a local branch office of Fortis.

 One day later negotiations started to save Fortis from bankruptcy. Today I read that ABN AMRO has to be sold to another bank. This will not solve the problem at all. It will speed up the Process of Desintegration of the Banking Industry that has started ten years ago.

 Just one year ago I wrote three blogs about the Merger of Fortis and ABN AMRO. Based on my own experience with the Merger of ABN and AMRO I predicted a possible failure of this merger. I predicted a possible failure because I did not believe the Technical Infrastructure and the Culture of both banks could be easily matched. I was Right. The Credit Crunch was the Cause of the Downfall but the Culture and the IT-Systems were the real reason. The Aim of Management was to make Big Deals (to get Big Bonusses) and the Systems were unable to provide the Right Data.

I have been working in the Money Market for a long time. In my opinion the biggest problem in the Banking Industry is the relationship between the Accountable, Bookkeeping, Systems and the Activities of Dealers. A small part of the Dealers are and were taking Enormous Risks by creating very complicated financial constructions (Derivatives). The Auditors (and the Management) of Banks have lost Oversight a very long time ago. This problem increases in severity when banks are merged.

Every time when a New Technology is implemented the Quality of the ICT-systems deteriorates. This has happened so many times that nobody really understands what the IT-Systems are really doing. Every time when a merger is accomplished the financial data of a bank (or other company) deteriorate. Two of more deteriorated systems are connected creating a bigger mess. Every time when a merger is accomplished the people who have an understanding of the ICT-systems know less about the Systems.

When a Merger takes place the motivated and skillful employees leave the “sinking ship”. The people that remain become “apathic”. They perform their duty in a “nine to five”-mode. Innovation stops. External advisory companies (or worse) outside outsourcing companies take over the maintenance and the development of the software. The quality of the software deteriorates again. The problem increases when packages or software layers are implemented. This happened in every bank around the world.

When I worked with ABN AMRO the biggest mess in IT was always created in the US. The main reason was the “opportunistic” attitude of the Management or the entrepeneurs attitude of the Management. They experimented with everything they could find but never finished anything. The US Financial System was far behind the Dutch Financial System in terms of Products and Supervision. Everybody believed the US was the most innovative in everything but they were certainly not the most advanced in Banking and IT.

 ABN AMRO was one of the bad performers in the Consumer Banking Industry in the Netherlands. The personnel of the Bank were not motivated for a long time. The main reason was the Management. Everything was decided at the top in big Staff Departments. The Branches were forced to implement what they had designed.

 The Management of the Bank loved to do Big Deals with Big Companies. ABN and AMRO were Deal-Making companies and were forced to move into the Consumer Market when the employees of all the companies in the Netherlands were forced to open bank-accounts. The Customer was never priority number one.

The decision structure of the Bank was highly complex and changed all the time. Employees at the branches were not allowed to take initiative. When they had taken initiative it took a long time before the decision was made. Most of the time the answer was negative.

The forced merger with Fortis decreased the motivation of the employees. It increased the complexity of the IT-Systems and the decision structure.

Fortis needed money and many parts were sold to other banks. Every time the Organization and the ICT-systems of the bank had to be divided in many parts. Before this process was even settled a new split was announced. This process was repeated until today.

The Consumer Banking Division of ABN AMRO, the “beautiful pearl” Fortis was after, was carefully protected. The integration of this part with Fortis proceeded. Many people moved to Brussels to create and implement a plan. Many outside advisors earned a lot of money again. Nobody had any oversight. A few weeks ago somebody finally decided to merge the branch-offices. They created new organization structures, appointed new managers, talked with the employees and send an announcement to their customers. This announcement was received last Friday! Two days later all the projects have been stopped and the employees of Fortis are leaving ABN AMRO. Nobody knows what to do!

The financial people were constantly trying to understand what the Risks were. Everytime a new problem arose and the Board had to take action. The message to the outside world changed all the time and the investors lost their faith in Fortis. The End of the (Credit) Line was reached last Friday!

A few days ago somebody decided ABN AMRO had to be sold to another bank to create enough cash to pay the current debts. The process of integration has to be reversed and a new process of integration has to be started with another Bank.You don’t have to be an expert to understand what will happen. The end of this process will be Total Chaos.

I am not afraid I will lose my Savings. The Government will take care.

I am not afraid to lose my shares. I have sold them a long time ago.

I am not afraid the bookkeeping systems of the Bank will finally break down and ABN AMRO will deny I am a Customer or present completely different data about my savings-account.

I am sure many things will go wrong. During my time as a customer of ABN AMRO the amount of mistakes that were made increased. Most of the mistakes were small but some of them really cost me a lot of time and money.

I am afraid  nobody will be able to help me when things go wrong. I just want a little bit of Service. Nothing More. I have decided to leave ABN AMRO. I am moving to RABO-bank.

I hope they will not buy ABN AMRO or merge with another bank. If this happens I have to find another Bank but I really don’t know where to go. At that time I probably have to buy Gold or another Object that keeps its value a long time ago. I really don’t know what will be valuable in the future.

Perhaps I have to start a farm and grow my own food at a place that will not be affected by the rising of the sea-level or big tornado’s or big earthquakes or heavy rain or intense drought or intense cold when the Ice-Age starts.

LINKS

 About the Merger of Fortis and ABN AMRO (Culture)

About the Merger of Fortis and ABN AMRO (Software)

About the Merger of Fortis and ABN AMRO (The Bank of the Heart)

About the Crisis in IT (About Software Layers)

About the Crisis in IT (About Outsourcing)

 About the Crisis in IT (About ERP Packages)

About the Crisis in the Banking Industry (Avalanches)

About the Crisis in the Banking Industry (Fraud)

 

 

 

 

 

 

A Very Strange Way to Explain the Current Crisis

I wrote and thought a lot about Time and Time Travel. My investigations made it clear to me that Time Travel must be possible and is also happening. Most people are not aware of the Cyclic Patterns of Time.

They think Time is a Line extending into Infinity. The Cyclic Patterns are moving With the Clock and Counter the Clock. At this moment The Cycles are Reversing in Time. This explains the current Crisis.

The conclusion of my research in Time was that we are traveling through a Vibrating Static Structure, A Fluent Crystal, which contains a huge amount of possible paths. We have Free Choice to travel the many Paths but the Amount of Possible Choices is fixed.

When we are traveling and return at the same point we started our traveling, we have gone through a Cycle.

When you go to work in the morning and return at home in the evening and repeat this sequence day after day you are moving through a very simple cycle. When you Repeat the Same Mistakes all the Time you are moving through a Cycle. When you are Born and Die you are moving through a Cycle called Life.

Cycles can be very complex. They are sometimes so complex that you are not aware you are repeating the same pattern all the time. You are experiencing the Feeling of Freedom of Choice because you are not Observing Your Path.

When you are Capable of Observing Your Path the Cyclic Behavior Ends. You Watch the Cycle but you are not In the Cycle. You are freed from the Cycle when you don’t make a Choice at all. This is what the Chinese Masters call the Tao.

Cycles basically move in two directions. They move With the Clock and Counter the Clock. Our Clocks move With the Clock so we assume that Time is moving With the Clock. When we move Counter the Clock we are moving Back in Time.

Cycles With the Clock, are Positive, Generating, Cycles.

Cycles Counter the Clock , are Negative, Destructive, Cycles.

The direction of a rotation is called Spin.

If we combine two Cycles that are moving With AND Counter the Clock an interesting structure appears. This Structure is called the Moebius Ring and is often used to represent the Symbol of Infinity, the Lemniscate or Ourobouros (A Snake).

The Moebius Ring is a very interesting structure because it does not have an Above and an Under. When you are traveling the Boundary you are always traveling the Same Surface. The Moebius Ring is easily constructed by connecting the two ends of a strip of twisted paper.

To Change the Direction of a Cycle you have to introduce a Twist.

To Travel Time you to have to Twist Time.

The Twist is an interesting concept. One of the Questions you could ask is if You would experience a Twist when it happened. The answer is Yes and No. Yes, when the Twist is an Up or Down Peak (An Event). No, when the Twist is a smooth path.

The most interesting Peak Experience in Life is Death. At that time the Cycle of Life is closed and another Cycle with a different Spin starts. Many cultures believe the Cycle of Death is real. In Western Society many people believe the Cycle of Death is non existent. Scientists are spending a lot of time to prove that the moment of Death is the End of Everything.

History is moving through Cycles. At some point in time many people feel History is Repeating Itself. Most of the time people believe the Cycles are moving into a certain direction. They are moving UP and DOWN. When you look at the Economic Cycles the data show that the Economic Cycles are Moving UP.

In reality the UP Cycle behind the Economic Cycle is another Cycle that is in its UP-state. Behind this Cycle is another (Long-Term) Cycle and another Cycle and …but somewhere the Cycle of Cycles (A Spiral) is Closed in Itself (A Spiraling Spiral). Just like the Moebius Ring there is no Above and Under. We are (Time-)traveling a Boundary that is closed in itself.

I don’t think many people will disagree with the concept of Cycles in History. The Theory of Economic Cycles has proven itself without any Doubt.

I don’t think many people understand that Cycles are moving in two directions. They believe the Cycles are moving With the Clock. If you believe Cycles move With the Clock it is easy to see that the Seasons are a beautiful Metaphor to understand Cyclic Behavior.

But what will happen when the Cycles of History move Counter the Clock???

If we would move through time Counter the Clock History would repeat itself just like History is Repeating Itself when we move With the Clock but the Stages of the Cycle (The Seasons) would show themselves in a Different Order.

If the Cycle With the Clock is an UP Cycle, the Cycle Counter the Clock would be a Down Cycle.

If you read the references in this Blog you will see that Western Culture is (or was) moving Counter The Clock, a CYCLE of DESTRUCTION.

The Cycle of Destruction (Capitalism, Materialism) was seen as a positive Cycle by many People but now they are becoming Aware of Reality. Western Culture is destructing Nature. It is not only destructing Nature but it is also destructing Human Culture.

At a certain point in time the Cycle HAS TO REVERSE. This TWIST is a Peak Experience, a Major Crisis. I hope You now See what is really Happening. We are Reversing the Cycle and the new Cycle is a GENERATING CYCLE. We are really Moving UP into a new state of Consciousnesa. This new state is not the state people who love materialism and capitalism (and War and Destruction and Greed and Control and Desire and …) will like.

LINKS

About The Twist in History

 About the Twist in Literature

About Cyclic Behavior in History

About Cyclic Behavior in History

Using the Seasons to Understand Cycles

 

What is Happening in the Financial System

The current Foundation of the World Financial System, the US Economy based on the Dollar, is in a Fatal Crisis. The Solution to the Current Crisis, Bailing Out, will finally Speed Up the Crisis. The real problem is moved to the Near Future, to another Level of Society (MiddleClass, the Poor) and to another part of the World. In the End it will fireback on the US itself and deepen the Recession that is already taking place.

Money represents a Value of Something. For a very long time money was based on the value of Gold. This foundation failed. The failure of the Gold Based Money system created the Great Depression and finally the Second World War. At this moment the Financial System is without any Foundation.

To prevent a Third World War the Bretton Woods Agreement was created in 1947. The foundation of the International Money System was based on the Dollar. In 1971 the US broke up the Agreement because it was unable to stabilize the International System. At that time the US was spending too much money to fight the war in Vietnam. It became a Debtor and remained a Debtor until today.

From that Time on the International Money System is Floating but the Foundation, the Dollar, is still used. The Euro is an alternative but it is almost impossible to move to the Euro without destroying the US Economy and the World Economy. Europe, China and even Russia are Forced to help the Biggest Debtor in the World to avoid the destruction of their own Financial System. In the mean time the Biggest Debtor in the World keeps on Spending. It is even Increasing its Spending Behavior.

Many people believe that the reason behind the Financial Crisis is the Credit Crunch. They believe mortgages are the cause of everything but the reason is much more complicated. The main reason are financial derivatives.

Derivatives are very complicated ways to gamble with money. They are so complicated that almost nobody is able to calculate the value of these financial instruments. They are so complicated that almost nobody is able to keep the books. The controllers of the banks lost the control a very long time ago.

 

Derivatives are the playingfield of dealers and the dealers are able to confuse almost everybody when they want to play their game. The effect of playing dealers has shown itself in many cases like the falldown of Barings. The Derivatives have transformed The Banking Industry into a Casino.

The US Government and its Allies are trying to avoid a new Great Depression by bailing out or protecting every US Bank, Insurance Company and other Company (Farmers, Chrysler, Boeing, Ford, ..) that is unable to pay its debts. The US Government is moving the huge and uncertain debt from the Market to the Government hoping the Market will Restore itself. They believe the Market is going Up and Down. Someday they will be able to Sell the current Debt with a Profit back to the Market.

The strange thing is that other countries are helping the US to protect their vital companies from a certain disaster. The US, the Protector of the Free Market, is protecting its Own market and the only reason why others are helping the US is to avoid a certain disaster on the level of the World. Strangely enough they are disturbing their own market to avoid the destruction of the market of their biggest competitor.

In the background investors, Countries and Companies are slowly moving out of the US Economy. The are investing in Europa (Warren Buffett) or are creating their own financial market and currency (China, Russia, India).Nobody believes the US will recover but they have to prevent a total meltdown.

China is even taking over control of the US Economy. With their enormouss funds they will be alble to “blackmail” the US. They are already doing this. The Chinese are in contrary to the US fighting the war with the Wapens of their Opponent. They know how to win without fighting.

What many peopl don’t realize is that the long term Economic Cycle (The Kondratiev) is going Down for about 26 years. We have entered a State of Compression in 2000. The Expansion of the World Economy during the last 26 years has stopped. We are just in the beginning of the Phase of Compression.

During the phase of compression the Baby Boomers will stop working. They have invested a lot of money to buy a pension. During the compression their pensions will evaporate. During the phase of compression many people will get old and ill. The Social System will be without any money to help them. Many people will move into a very angry state when they realize what really has happened.

During the Downfall The Debts will increase tremendously. The move from the Market to the Government (and the Tax Payer) is a temporary solution. Someday the Debts have to be repayed and the only thing US Govenment can do is to accept the fact that the US and the strongly related Western Economy will enter a state of Recession.

The Economic Activity will go Down but Social Activities will Move Up. When you are losing money somebody (Your Friends, Your Family, Your Community) has to help you.

What many people also don’t realize is that the very long time cycles are supporting the DownFall of the Economic System. The very long time cycles and especially the Cycle of the Precession is Jumping to a new Level. It is jumping to a higher level of Consciousness.

The current instability of the World System is not only visible in the Financial System. It shows itself in every System of the World. It shows itself in the Psychological System, the Cultural System, The Religiouss System, the Political System, the Ecological System, the Weather System and the Planetary System.

These Systems are highly interconnected. A Disaster in one of the Systems has an impact on all of the other Systems. When the Financial System is fixed, a Political Conflict (Russia) starts and the Financial System is unbalanced. When the Political System is stabilized a huge Earthquake or a giant Tornado will move the total System into unbalance. This will go on and on until everybody realizes that we are living in a Highly Interconnected Reality.

The only thing we can do is to act on the Level of Earth and Face Reality. We have to realize that all the Isolated Systems are One and the only thing we can do is to find Balance on Every Level.

We could start to Find Balance on the Level of the Human.

We could start to Reduce the Power of the Ego, Desire, by reducing our Needs.

We could start to Reduce the Power of our Expectation, our Thinking, and start to Trust the Other.

We could start to Empower our Imagination, Spirit, and Imagine a Shared Future.

We could start to Empower our Soul, Empathy, and start to Take Care of Others.

We could start to use our Consciousness and become Aware of what is really Happening.

Many people believe the current crisis will be a Fatal Crisis, a (Financial) Apocalyps. I don’t believe this will be the case.

Imagine a world were you are not Working all the time. Imagine a Life without Stress.

Imagine a World where You don’t have to Play Political Games to Survive.

Imagine a world where You could enjoy Nature.

Imagine a World were You are able to Help without Being Payd.

Imagine a World were you are able to Create when You want to do this. Imagine a World without War and Violence. The only thing You have to do is Leave a Little Bit of Your Current Luxury behind.

If this happens the Downfall of the Bad Buck would be replaced by a tremendous Rise of Good Luck.

LINKS

How the Great Depression was created

About Derivatives, Accountants, Greed and other terrible problems in the Banking Industry

 

 

How the Proof of the Pudding is Really in the Eating

When you want to know the truth you are looking for facts. This seems very evident but Philosophy and especially the field of Epistemology has spend a lot of time to find out if this Statement about Truth is really True.

The first step is to look up the definition of the word “fact“. We use Wordnet to do this. WordNet is a semantic lexicon for the English Language. The database contains about 150,000 words.

Fact: A piece of information about circumstances that exist or events that have occurred.
Fact: A statement or assertion of verified information about something that is the case or has happened.
Fact: An event known to have happened or something known to have existed.
Fact: A concept whose truth can be proved.

The meaning of words changes in history. If you want to know how the meaning is changed you have to look up the Etymology of the word.

Fact: 1539, “action” especially “evil deed,” from L. factum “event, occurrence,” lit. “thing done,” from neut. pp. of facere “to do”. Usual modern sense of “thing known to be true” appeared 1632, from notion of “something that has actually occurred.”

When we combine the result of both dictionaries we see that the original meaning of the word “Fact” is-related to the word “Event”. Later around 1632 it changed into a concept “whose truth can be proved”.

To find more about the meaning of the word Event we can look for all the occurrences of this word in the sentences of English language. One of the scientists who spend a lot of time researching the meaning of the word “Event” is George Lakoff. He defined The Event Structure Metaphor.

A Metaphor Is-A Mapping. A Mapping Is-A Relation between two Domains, the Source and the Target.

The Event Structure Metaphor is one of the most widespread of all the conceptual metaphors in the world. It maps from the source domain of Space to the target domain of Events, and leads to the following concepts:

A State Is-A Location (a bounded region in space).
A Change Is-A Movement (into or out of bounded region).
A Cause Is-A Force.
An Action Is-A Self-Propelled Movement.
A Purpose Is-A Destination.
A Mean Is-A Path to destinations.
A Difficulty Is-A Blockage.
Expected Progress Is-A Travel Schedule.
A Schedule Is-A Virtual Traveler, who reaches pre-arranged destinations at pre-arranged times.
An External Event Is-A Large Moving Object.
A Long-term, purposeful activity Is-A Journey
.

An Event Is-A Blockage that prevents us to Move from One Destination to an other Destination in the Journey called Life. To Move from one Destination to an other Destination we are Propelling our Self. Sometimes we are propelled By something else, An External Event. If this Happens it feels like we are hit by a Large Moving Object.

When we are Hit by an External Event “things get out of hand” or “we are not able to keep a tight rein on the situation” or “we are not going with the flow” or “things take a turn for the worse“.

A Fact is an Event that Causes the Emotion of Frustration (Anger, Irritation, Sadness, Worry,..). An Event Forces us to Move Away from our Original Route, the Path that leads us to the Destination that we wanted to Reach in Life. We have to take a Detour.

What happened around 1632?

Around 1632 Francis Bacon advocated a new method for achieving knowledge, based on careful observation and eliminative induction. Bacon warned that effective reasoning must be freed from the “idolatrous” influence of human nature (Emotions & Imagination).

Francis Bacon started The Age of Enlightenment. The Enlightenment advocated reason as a means to establishing an authoritative philosophical system which would allow human beings to obtain objective truth about the whole of reality. Much later Emmual Kant dedicated his Critique of Pure Reason to Francis Bacon.

What happened?

Facts were moved from the Emotions (Judgement, Opinion) to the Level of the Mind (Truth). With the help of Logic it would be possible to Prove Everything.

According to Aristotle there are four types of truth: universal affirmatives take the form: All S are P, universal negations take the form: No S are P, particular affirmatives take the form: Some S are P, particular negations take the form: Some S are not P. Later so called contingent truths were added. They are dependent on the situation/context.

The Quest for the Eternal Logical Truth is still going on. Many very bright minds have tried to find a solution but the terrible thing is that the Truth of a logical proposition is entirely dependent on the Truth of the Facts that are put into the Proposition. We are again in a State of Infinite Regress.

One of these bright minds was Frank Plumpton Ramsey (1903-1930). Ramsey lived and worked in Cambridge and was befriended with Bertrand Russell, G. E. Moore, J. M. Keynes and Ludwig Wittgenstein. Ramsey created a theory called Pragmatism.

In his paper ‘Truth and Probability’, written in 1926, Ramsey shows that if people in their behaviour obey a set of axioms or rules, the measure of our ‘degrees of belief’ will satisfy the laws of probability. The Truth is highly related to Judgment and “if we have analysed judgment we have solved the problem of truth“.

“..it is, for instance, possible to say that a chicken believes a certain sort of caterpillar to be poisonous, and mean by that merely that it abstains from eating such caterpillars on account of unpleasant experiences connected with them. … An exact analysis of this relation would be very difficult, but it might well be held that in regard to this kind of belief the pragmatist view was correct, i.e. that the relation between the chicken’s behaviour and the objective factors was that the actions were such as to be useful if, and only if, the caterpillars were actually poisonous. Thus any set of actions for whose utility p is a necessary and sufficient condition might be called a belief that p, and so would be true if p, i.e., if they are useful“.

What Ramsey is telling is that “the proof of the pudding is in the eating“.

What happened?

We are finally back to square one! After about 400 years of Enlightment we have to admit that the only way to find the Truth is to find out if what we Think is true is really True. We don’t have to use very complicated reasoning to prove what we are already experiencing in the Real World.

LINKS

About Logic and Alchemy

About the Age of Reason

About Pragmatism and Ramsay

About Truth

About The End of the Dollar

A well-known scientist once gave a public lecture on astronomy. He described how the earth orbits around the sun and how the sun, in turn, orbits around the center of a vast collection of stars called our galaxy.

At the end of the lecture, a little old lady at the back of the room got up and said: “What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise” The scientist gave a superior smile before replying, “What is the tortoise standing on?” “You’re very clever, young man, very clever,” said the old lady. “But it’s turtles all the way down!”

The Financial System of the World is a special version of “Turtles all the way down“. At this moment one of the pillars of the US Financial System (Fannie Mae and Freddie Mac) is falling and many people hope it will be supported by a financial pillar, the US Government. The two pillars have financed 5.2 trillion dollars of mortgages (5.200.000.000.000).

Since 1970, the US Federal Government has run deficits for all but four years (1998-2001) adding to a total debt of 9.5 trillion of dollars (9.500.000.000.000). If you include entitlements such as Social Securityand Medicare the debt is $53 trillion—or $175,000 for every American—andrising.

A huge part of the debt is held by two pillars, the central banks of Japan and China. The Central Banks of China and Japan are slowly moving out of the Dollar. This pillar is falling also.

The Citizens of the US are the only turtles that are left. The US Government could raise taxes, reduce its spending or raise the interest rate. In all the cases the US Economy would fall into a recession. They are unable to do this. The US voters will never elect an American President who is raising taxes or will move its country into a recession. They will always vote for the Big Spender.

Below the last pillar is Emptyness, the Abyss, The Underworld, Hell. The Universe is floating in Nothingness. The Universe is floating because it is moving. Movement is the essence of the Universe.

The problem of Turtles all the Way Down (Infinite Regress) can be solved in a Circular, Rotating, Cyclic model. In a Circular model there is No cause and there is no End. Every point is a Beginning and an End. Every Cause comes back on Itself. In the End the US has to solve its own problems and the only way to solve its problems is to accept a Recession.

The US Financial System has generated a debt for more than 30 years. They were supported by other countries to expand their economy. These countries needed the US as a buyer of their products. They also needed the US to copy their Technology and their Science.

At this moment the Economic Activity in the World is moving to the East. The countries that supported the US the most, Japan and China, are now creating their own Cycle and their own market. This cycle is completed by the addition of India and Russia. In due time they don’t need the US Market, the US Technology and US Science anymore. The US has given them all the opportunities by Outsourcing many of their activities.

Japan and China are becoming friends again and they have their finger on the trigger of the financial gun. When they move into another currency or create their own currency the US financial system dies immedeatly. They don’t need a war to win the war.