Monday, 7 June 2010

Beyond politics...

If you hold any fascination with the study of systems this is your week to ponder. The financial markets and the world economy are clattering in the press about interbank liquidity, the euro crisis and the solvency of several nations. Layered on top of this all is a perceptual web that remembers the past few years and knows the problem is not solved. Nonetheless, we march on. The new evil according to the press and the politicians is national debt. The phrase du jour is "fiscal austerity" and the turning of focus on the mechanisms of this variable brings forth a Salman Rushdie stream-of-consciousness cast of characters, scenarios and yes, politics.

The hidden ghost in the machine is an algorithmic web that toys with these shifts and removes any sense of logic to the casual spectator. If liquidity is the issue, one has to look past the debt ingesting behavior of individual nations. Electronic trading platforms for bonds have increased the bond trade to such an extent that the notion of liquidity is shifting more to take on board the computerization and subsequent increase in bond trading. In other words, "more" was created, and now, the world is pondering this notion of "more" whilst the economies falter and the computers keep churning. The everyday panics and bumps are bigger in this environment, and, the risks have increased. So, then, welcome to the new world. You have been here for a while but it has just raised to the surface and poked you in the eye. And, there is more, but this is a simplified paragraph because I need a cigarette. And it is a blog after all. In essence, the key thing is our notion and definition of liquidity is shifting in a pretty Wittgenstinian kind of way. Roll with it.

Inherently, this new world is really quite fine. But, like any revolution, there are adjustments to be made. This is one of those historical periods of change that will sit in the classrooms of the future. "Let the material express itself" was the dogma of my high school sculpture teacher. I sat in the front unmalleable, and, mumbled, "Yes, but then, what?"...