Stein’s Law (or The Math Dictates It)
In today’s E-mini Real-Time Trading Session, I observed that no matter what happens, it would appear that the U.S. is heading toward universal, single payer medical insurance and made a conditional prediction for the 2012 election.
Observation + Logic + Math > Fire > Rocks > Faith
For most of history, man took action and held beliefs based on faith because he possessed no tools to ascertain the facts or analyze them. The guy with the winning idea was the one who managed to kill or convert the others.
We learned to use fear as a motivator, to turn rocks into arrowheads, to harness fire, but sadly, the scientific method, math and logic continues to remain out of reach for most humans. The millenial conflict in the Middle East is one such example. So is the healthcare “debate”.
I think that it is a relatively good approximation to truth — which is much too complicated to allow anything but approximations — that mathematical ideas originate in empirics. But, once they are conceived, the subject begins to live a peculiar life of its own and is … governed by almost entirely aesthetical motivations. In other words, at a great distance from its empirical source, or after much “abstract” inbreeding, a mathematical subject is in danger of degeneration. Whenever this stage is reached the only remedy seems to me to be the rejuvenating return to the source: the reinjection of more or less directly empirical ideas. — John von Neumann
Those who play the market based on faith in some idea or concept should not be surprised when they lose money. The difference is that I am not out there trying to convince and convert them to what they view as our “beliefs” (which are in reality, an objective METHOD based on first principles). If anything, we need as many people to be as wrong as possible in order to make the most amount of money
That’s why I don’t ever argue with anyone. It’s bad for business.
Dumb Healthcare Debate
Check out these two slides from last weekend’s Meet The Press. The people insist on no cuts…
…but don’t want to borrow more.
How will this be reconciled? Not by debate, that’s for sure.
This is not a political statement. Unless the nation is willing to kick the old and sick to the curb, at some point, the number of uninsurable people will grow to a mindboggling number and short of turning them away from hospitals, something will have to be done. It is possible that the lack of insurable people will lead to lower prices in the future.
Given the stalemate, we simply wait for Stein’s Law (If something cannot go on forever, it will stop.) to kick in and let the chips fall where they may. The math simply dictates it.
The Numbers Don’t Add Up
I also saw a number this past weekend — something like the average senior citizen contributes $100,000 into Medicare but will enjoy $400,000 of benefits — that will never add up. It would appear that those under 55 will be called upon to foot the bill, but since they have been told they will not enjoy the same level of service as those currently over 55, what is the incentive for them to comply?
There is an old Chinese saying, that you chose to either berate or beat during a disciplinary action, but you cannot do both. Sort of like seize or sue. Or double jeopardy. In this case, young people are expected to endure double punishment, and somehow, I don’t think this will fly.