Zugzwang...

Zugzwang...the Germans are certainly good at coming up with amazingly appropriate words for any situation.  In combinational game theory, the meaning of zugzwang is simply when a player is in a position to make a move in a game, and, any move taken will lead to defeat.  In chess, the meaning is expanded to cover situations where a move by a player will make that players situation worse.

Games of strategy like chess or checkers are enticing because we can see all the moves and implications as they progress.  In sum, the game is public in nature.  Combinational game theory concentrates on the combination of two things and forecasting the outcome.

Game theory in an economic or market focused sense gets a bit more complex as one might deduce.  There are obviously more variables and much of the information is not "public".

Now comes the slow drift downward of the markets.  The banks are releasing data of losses and the mathematical magic show is going public.  A slow evening and morning was spent reading the Counterparty Risk Management Policy Group's most interesting but tedious essay entitled "Containing Systemic Risk: The Road to Reform".  It was written in the beginning of August of last year and, by now, ought to be on the best seller list.  Perhaps the banks who wrote it ought to think about a career in publishing. I do have to admit I did drift more than a bit while trying to read it.  If they could spice it up, it might make the banks a little cash on the side - something they seem to really need.  Why not take all this captivating but dead tedious information and put it on a nicer plate - I envision a Vanity Fair style essay with the behind the scenes personality profiles and caricatures...