No Pain No Gain?

or how Idiots destroyed the Casino

The Theory That Would Not Die: How Bayes' Rule Cracked the Enigma Code, Hunted Down Russian Submarines, and Emerged Triumphant from Two Centuries of Controversy

The book is amasing. Bayes contradicts number theory. Yes, Bayes is very elegant and arousing for cult workers and gamblers. The dude, who once called it "crack cocain of modern statistics ... seductive, addictive and destructive" was *absolutely* correct. And now that same dude is recruiting the addicts to do more damage for one US corporation. Books are cool. Even when the author has no idea what they are talking about.

Let's ask the simple question. In case of a Casino, is Casino better off when the dealer stacks the deck, or is Casino better off when the pure chance stacks the deck? Simple minded people would usually say : Of course - the rigged dealer is *better* for a Casino! "Everybody knows, the game is rigged" and all that jazz. Only in reality it's not so simple (and in a way it is similiar to Automation Paradox)

Here is why.

Everything is a complex combination of probabilities, that was *very* hard to figure out before 2008. Only in 2008 they decided to simplify things (Obamacare basically destroyed the state of the art medical insurance industry of the US and because of that, the US lost set of critical defence mechanisms). Then in 2016 they simplified things even more, weaponizing the USD.

As a result, they took the once *very* complex system of US governance and dumbed it down to something very simple, like "we print money and pump oil and that's it".

They thought that they were improving things, but as a result of the simplification they opened up the doors to very primitive attacks on the US financial system. And that happened in 2020-21 (the trillions of dollars were just "transferred" and "nobody knows where")

So on one hand you are right - the rule of "risk/reward" is in general "correct".

Only it is "more correct" and "less correct".

Some of US fintech management (let's call them "idiots") decided that stacking the deck increases the defence. In fact the *opposite* is true. When the deck is stacked every day and everybody knows the way it is stacked - Casino can not possibly win.

Snowden pointed that out many years ago. He pointed to the fact that Facebook choice dialogs only have a button "Ok". (The actual choice dialog should have "Yes", "No" and "Cancel" choice. Or at least "Ok" and "Cancel")

By minimizing choice and simplifying the system you *grossly* simplify the trade. And that always backfires. It just did in 2020. Hard not to see it. It's planet scale.

How Redditors Exposed The Stock Market | The Problem With Jon Stewart - has a nice diagram(s) (and overall good explanation of what was happening).

Aug 27 2022

Another moment from that book - Pierre-Simon Laplace was most likely not one dude, but a representative of a collective. Because I now understand exactly what he was doing (he was doing everything I was doing myself, only he had no computer, so he had to do it all manually - which is impossible for a single human being). The question now is "why would a group of people hide their work behind a fake representative?" (Burbaki was the same). And the answer is in this book: Infinitesimal: How a Dangerous Mathematical Theory Shaped the Modern World.. It's not the first time the planet has to deal with the Idiots and the Idiots always do the same thing to anybody, who is smarter than them. Of course smart people have to hide behind a (protected) representative. No magic in that.

I find it very charming that at some point Laplace said that because he hates gambling, he will drop it and get back to calculating planets orbits. That's because mathematics of gambling is a bit more complex actually. Because gambling adapts realtime. Cycles are shorter. And he had no computer. So he just dropped the whole thing (at the most interesting inflection point, by the way). It's all in a book. It's a great book, really. Maybe exactly because author has no idea what is she *really* talking about.

Aug 28 2022

From BTC page

The first episode of British Sherlock Holmes (the taxi driver) is a stunning example of british math versus french/german math. Hardcore european mathematicians simply write it off as "this is not math". Only it is. It is ML math. Gives a good idea about the future also.

Sep 14 2022

Kolmogorov also contradicts number theory. He contradicts it because of Deblin method. Now the problem is that Deblin method can not be found. There is Keith Devlin in Stanford. Mathematician. Looks like Gavin. Born in 1947. Kolmogorov's work is 1949. And using that approach they could not possibly shoot accurately. Mathematically impossible. Yeah!

By the way this ML stuff. It's from the 40s. Some "New Technology" indeed.

Sep 19 2022

The puzzle from Abigail Disney

Documentary filmmaker Abigail Disney, granddaughter of Disney co-founder Roy Disney: The American Dream and Other Fairy Tales

In that documentary Abigail points to the fact that salary of Disney's CEO (Robert Iger, he was removed in 2020) was 700x times the average salary of Disney rank and file staff. She was pointing to the fact that it's ridiculous (everybody agrees on that), she was asking what can be done? (The answer was "nobody knows, because if salaries raised Disney will be toasted on stock market" (questionable statement)). In general the overall idea was that "well, something might be done but it looks complex we don't know what should be done". This is because most of US management has no math education. In reality, the formulas exist how to handle these kinds of wages discrepancies, and those formulas are known for *centuries*. A friend of mine did his PHD on similar topic (in collapsing SU). But more interesting was observation of my wife, who run the numbers and calculated the leveraged reasonable ratio. It should be not 700x but 40x for a solid hierarchy introduced by Dutch into Peter The Great Russia. Peter : 1675 - 1725. So yes. Those formulas are known to Dutch since XXVII century. Also Parkinson's law. (1942).

Bring educated people into the government. It might go a long way.

Sep 24 2022