Tuesday, July 18, 2017

This Guy's Too Smart To Be A Derivatives Analyst: Information and Wetware Edition

Via ZeroHedge, July 2:
...When information becomes a commodity, it takes very little time for it to lose its value. Unlike other (physical) commodities whose price is driven by diminishing supply, information markets are exact opposite -- their essence is captured by diminishing demand. On one side, there is nothing to slow down its supply – it costs nothing to produce it. On the other, demand for information is biologically constrained by our capacity to absorb a limited amount of it. So, sooner or later, we have to reach a state of semiotic inflation where more information buys less meaning. The rate at which we reach this point depends only on the efficiency of the media. It is safe to say that in the last decade, especially the last five years, we have witnessed an accelerated approach to the state of super- fluid information flows.

This is when the positive feedback begins. When we operate under informational overload, we tend to defend ourselves by filtering excess information. It means that we are deliberately underplaying the importance of its content and implicitly questioning credibility of its sources. This can be perceived by those who observe us (our parents, guardians, parole officers, risk managers…) as troubling. And the more we ignore their warnings, the more they will be warning us. This is an example of disappearance due to proliferation: Filtering of the information forces its proliferation which is further ignored (we can’t absorb any more) and its production further reinforced until it is completely ignored and, therefore, invisible....
-Aleksandar Kocic
Managing Director, Deutsche Bank
As quoted in "Deutsche: The Market Broke In 2012, 'This Is What Everyone Is Talking About'"

A note on the headline: as one of the original popularizers of the term, Rudy's going to be pissed at me for misusing it:

"In its original, intended meaning, wetware is the underlying generative code for an organism, as found in the genetic material, in the biochemistry of the cells, and in the architecture of the body’s tissues." -Rudy Rucker