Saturday, April 27, 2013

Flukes and Whales, Black Swans

When I was just getting onto the internet in 1993, I read a newsgroup, a BBS, on the alt domain called alt.cyberpunk. There was a frequent poster there with a signature file that read: "Beware of flukes. Sometimes they are attached to whales." It was more of a warning than a joke. That stayed with me.

In business way too many flukes turn up. This nagging problem leads to that equipment breaking, or this issue invalidates quality to every single product processed on the equipment. This failed test with a "process" to cheat it immediately after means 90% of the site's claimed stock is actually invalid and must be discarded, meaning the $100M they claim they have in inventory is really only worth about $1M, a 99% collapse in value that's being kept secret by the company executives and managers from the company's buyer who isn't aware of the problems consistently reported by operators/technicians to their shift leads and supervisors for years now. Stuff like that turns into a Whale. Those little flukes of failure. They are more commonly known today as Black Swan events, which are unexpected but possible outcomes that arise from bad luck. Hurricane Katrina flooding New Orleans was a black swan.

Often, it's random chance. If you're a Boy Scout like me, you plan for the worst, because you SEE the black swan so you know it exists. Boy Scouts don't die in the blizzard that blows up in June while hiking because they are prepared. Those do happen. Rarely, but they do. The Sims games are really good about teaching players to adapt and deal with the unexpected. Ironically, this is healing since most Sims players are Aspbergers/Autistic or OCD cases who feel the need to micromanage and control stuff, often because the pace of real life is too fast for them to keep up. Life feels out of control. The simulation of Godlike control calms them. I've got a cousin and uncle who were big on this, and my wife played quite a few of the newer Sims games, but always cheated with the money (big clue there!) because she really couldn't handle all the details. Watching one person, others would catch fire and die (actual plot point in The Sims, btw). Real businesses are like that. The fires are often metaphorical but you have to put them out or prevent them happening.

I play RPG games, which are also good business training. You start with a very small stake and put in the work and invest as you go in skills that help you gain profit, and you leave no money on the ground or you'll soon get stuck and unable to go forward, end up dying when you tackle a problem you can't handle. You take risks, you solve problems, you invest in yourself and your tools to get the job done and you become adaptive. And predictive. These are valid skills in the real world. Since they no longer teach business in public school, at ALL, games are the place kids will learn it. Ironic, right? Instead of turning kids violent, its teaching them to analyze and think. I think this is hilarious. Particularly since Critical Thinking was removed from the Graduation Requirements for California State University system. You can be a college graduate and completely ignorant. Critical Thinking enables you to deal with real life, rather than pretend it is what you say it is, what I call "insane" and psychologists define as "psychotic". I've met lots of psychotics over the years. Most are harmless, but never give them power over you. They will make your life hell.

The fluke-whale issue is one of the reasons people hand-wave peak oil as unimportant, despite momentary bitching at the gas pump every single fill-up. They DON'T understand that price increases may eventually lead to a Black Swan event, like a sudden loss of access to fuel, period. There are many potential causes for that, even real accidents.

People say all sorts of asinine things, but I remember 1979 quite well. I was only 8, but that's old enough to remember the gas lines, and rationing. I also remember 1974, when there was fuel rationing the first time since WW2. This country has had rationing several times. Kids these days pretend that history doesn't exist before they were born because they are psychotic. This nation is no longer effective at keeping the terrorists out. Some of them will be smart enough to hit us where it actually hurts. Ras Tanura loading platform is just sitting there, daring Iran or Saudi or some AQ team to blow it up. Our own refineries are poorly guarded as well. Break enough of those and we'll have a panic.

Eventually terrorists or an accident or some other random Black Swan will interrupt our critical supplies and the fluke of high prices turns into the whale of transportation panic and collapse. In a best case scenario there's armed guards at the gas stations and mandatory rationing instituted immediately instead of the worst case, which is riots, food hoarding, and arson, followed by full shut down of the economy worse than 1929. We had fuel in 1929. We don't have much now, and most of that would go to emergency services (riot police, fire, ambulance) and eventually food and medicine delivery trucks to keep the survivors of the initial panic under control and potentially alive, if govt considered population valuable.

At my job I face the street most the time and hear every vehicle engine as it goes by. I look up when I hear a scooter or motorcycle so I'm seeing how much 2-wheeled traffic goes back and forth through town. Its kinda surprising. It is increasing as the weather warms up. And I'm seeing more and more 250cc enduro bikes on the road. Near the high school, near the college, going across town. More and more of them. They're ugly, but they go anywhere and they handle the bumps. I also see tons of scooters. Not all of them are Vespas or Hondas either. I'm seeing some of the better Yamahas too. New ones. They cost a lot, but they have available parts and its not warranty-destroying to change the belt and oil. I think this community is moving in the right direction there. I'd like to see the State do better.


No comments:

Post a Comment