Panic on Wall Street and "recursive spin"

I first encountered what I shall call "recursive spin" in reinsurance.

Suppose a program is trying to value financial instrument A. Its value depends on financial instruments B, C, and D.

Financial instrument D's value depends on that of E, F and A.

The "spin" can appear at any level and will put a "straightforward" costing algorithm into a loop unless anticipated.

In preventing this from occuring in the mathematically parallel problem of finding out what tools are needed to support a software tool you must keep a separate hash table. When you visit a node, you must check to see if it is on this hash table of visited nodes.

Which is precisely the sort of arcane feature software and financial managers don't want you to spend time on.

Usually, this is due to their ignorance and normalized deviance in which it is the height of wisdom to "reason", as did the geniuses of Long Term Capital Management in 1998 when the failure of their genius model caused the East Asian meltdown, that all things will remain equal like they do in business books.

Sometimes however, putting a recursive loop in software is part of an attempt to defraud someone.

I do not know whether this problem is written in those business books written about financial markets. For one thing, the purpose of business books is as far as I can see to normalize deviance; in their own sweet way, they are no different from Communist text-books which would simply not question their system.

For another, as a wildly successful options trader informed me in Princeton, NJ, when on my first day I showed up, in my intellectual's way, with a stack of books on options trading, failures write business books: failures teach business classes. If they could succeed they would have no time to tell the secrets of the money game.

But we do find that many toilers in world financial centers troop on their off hours, not only to the turnverein, not only to the gym, not only to the bar, but also to writer's bun fights because the truth will get out.

In House of Cards, Hong Kong writer Peter Gregoire describes a recursive loop built into reinsurance contracts. This story is published in "Sweat and the City" (2006, Hong Kong Writer's Circle).

What is sustainable about an economy in which to make money you have to so depart from the Buddhist way of right livelihood?

The only people who play this game successfully are mutants, like the glamorous female manager at a Chicago consulting firm who loftily informed me, in 1979, that all possible compilers had been written, and who left a trail of broken careers behind her.

Sarah Palin is their gal.

Screw 'em. I'll teach English in a war zone before I again agree to meet a deadline in ways that destroy companies, and the public interest.