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A historical testimony to the US congress! Or is it?!
Can you recall a moment when you could honestly say ‘I told you so’, but when no one listens? Well this just might be one of those for me.

This Thursday September the 10th marks perhaps a historic development for both Washington and the financial markets. The US Congress’ Committee on Science and Technology held a hearing on the responsibility of mathematical model Value at Risk for the credit crisis.
Nassim Taleb has been invited as expert witness by the Committee. Being a real derivatives trader for decades, Taleb has been warning about VaR’s potential for destruction for at least 13 years.
Read the official Report on The Risks of Financial Modeling, VaR and the Economic Breakdown by Dr. Nassim N. Taleb here.
While Taleb was kicking ass in the US capital, I would like to contribute to the crusade by illuminating some insights from the now famous book The Black Swan.
For those mortal bipedal, carbon-based humanoid lifeforms with any significant level of complexity in their neo-cortical pathways who didn’t realize; ‘The Black Swan’ is not just another book. It in fact is a compilation of empirically valid phychological and logically coherent philosophical insights into the human mind and behavior, including the world around us, in which some thoughtful guy warns us for our ‘intellectuall arrogance’ and predisposed incompetence to harness the consequences of randomness in life, or any social situation for that matter.
This he eloquently calls ‘The Black Swans’, which is a technical name for the problem of induction in philosophy of science, especially social sciences that is.
I’ve always hoped, but never thought, that Nassim Taleb would get to be heard by the US congress. Is he just casting ‘pearls to swines’ here (as some guy called Jesus once said it) or is he really being heard?
Taleb, after 13 years of fighting against complex derivatives and bogus quantitative risk management, finally got his say in congress last week on 10-09-2009. In this video compilation you can see a few of the points he made there.
Nassim Taleb testifies before Congress, under oath, and uses his insights in errors conducted by humans in complex systems, like the financial markets, to warn against mishandling of these errors and the (im)morality of deficit spending and the culture of incentivizing failures with bonuses.
In short, the man gives his view on the current financial and economic crisis.
In addition, he also warns of the risks of hyperinflation and presents his technical work on the concept of ‘too big to fail’ (also discussed earlier here) which is directly applicable to the comtemporary banking and monetary systems. Taleb also refers to his previous articles, also discussed on this website, concerning the ever growig complexity in the world, economic ‘charlatanism’ and how to identify the situations that are inherently unpredictable. He also discusses his “Fourth Quadrant” of risks society should not bear because we cannot measure them.
For the technical appendix of the latter concerning Taleb’s article called “The Forth Quadrant” look here.
Taleb also opens a, not so suprising, frontal attack at the ‘Value at Risk’ (VaR) method. Value at Risk are the risk measuments methods used by Wall Street to hide risks and collect bonuses, and are, by the way, still taught at business schools accross the world albeit out of mere ignorance or paradigmati intellectual arrogance.
Although I didn’t compile the video, I would guess that these are just some of the rhetorical highlights needed to give an impression of his testimony to the congress about the financial markets and the contemporary economic situation the US, and the world. Surely, more is to follow so stay tuned.
- To know more about the congress testimony read also the article at Huffington Post: Obama Should Stop by Taleb’s Historic Congress Testimony
- To learn more on Nassim Taleb’s conceptualization of the world watch the follwing video LEARNING TO EXPECT THE UNEXPECTED
Filed under: Featured, Financial Crisis, Nassim Taleb, The Black Swan
Paul Romer, “A Theory of History, with an Application”
New Cities with New Rules
This talk was the first in a series of public discussions of an idea that Romer has been working on for two years.
His economic theory of history explains phenomena such as the constant improvement of the human standard of living by looking primarily at just two forms of innovative ideas: technology and rules.
Technologies rearrange materials with ingenious recipes and formulas. More people create more technologies, which in turn generates more people. In recent decades technology has enabled the “demographic transition” which lowers birthrates and raises income per person even higher as population levels off.
Rules structure the interactions between people. As population density increased, the idea of ownership became an important rule. A supporting rule for managing violations replaced the old idea of deadly vengeance with awarding damages instead: simply shifting value replaced destroying value. For the idea of open science, recognition replaced ownership as the main event, which means that whoever publishes first is most rewarded, and that accelerates science.
Rules can amplify or stifle technological progress. China was the world leader in inventing new technologies until about a thousand years ago, when centralized dynastic rules slowed innovation almost to a stop.
Romer notes that business keeps evolving as new companies introduce new rule sets. The good ideas are copied, and workers migrate from failing companies to the new and old ones where the new rules are working well. The same goes for countries. Starting about 1970, China took some of the effective rules of Hong Kong (which was managed from afar by England) and set up four special economic zones along the coast operating as imitation Hong Kongs. They worked so well that China rolled out the scheme for the whole country, and its Gross Domestic Product took off. “Hong Kong was the most successful economic development program in history.”
Romer suggests that we rethink sovereignty (respect borders, but maybe create new systems of administrative control); rethink citizenship (allowing perhaps for voice without residency as well as residency without voice); and rethink scale (instead of focusing on nations, focus on new cities.)
If nations are willing to experiment along these lines, they can create new places, places that can give more people access to the kind of rules that they would like to live and work under, and places that can sustain the historical process of entry and innovation in national systems of rules.
The idea is getting some traction in the developing world. This summer Romer will launch an institute and website for further exploration and eventual application of the idea.
One miracle of cities is that they sometimes renew themselves brilliantly. This could be a whole new form of that.
–Stewart Brand
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Filed under: Life, the Universe and Everything, The Long Now Foundation
The human side of climate change
The Long News: stories that might still matter fifty, or a hundred, or ten thousand years from now.

There have been a flurry of reports in the last few weeks which try to anticipate how climate change may impact human populations.
1. Two trends (urbanization and global warming) seem to be on a collision course: UN: Growth of slums boosting natural disaster risk
2. A first step towards further regulation, at least in the US: EPA declares fossil fuel emissions a health threat
3. A study from the Institute for Global Health: Doctors’ health warning on climate change
4. And from the World Wildlife Fund: Climate change threatens millions who live off sea
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Filed under: Life, the Universe and Everything, The Long Now Foundation
Live Twitter from Paul Romer Seminar
Follow @longnowlive on Twitter for live updates from Long Now events, including tonight’s Paul Romer Seminar which starts at 7:30 PST. Our special guest live Twitterer today is @mikl_em.
We encourage anyone else who would like to live twitter about the event to use the #longnow tag on their posts so that anyone can track the aggregate postings.
If you’d like to send in questions to @longnowlive, we’ll try to get them into the mix.
Please note that all the pre-sale tickets are sold out for the Romer talk, but we will have a walk up line that will be first come first serve to try and fill as many un-claimed seats as possible. There is also room for 100 walk-ups for the free simulcast in the Lobby – this is a separate line, so get there early!
Feel free to comment on this post with your twitter handle if you want others to know about your live twittering of this event…
PS: For those those of you wondering what Twitter is… here is a video that explains it.
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Filed under: Life, the Universe and Everything, The Long Now Foundation
Galactic Center Rising
But the Canon 5D used to capture this was modified by replacing the standard infrared filter that normally ships inside the camera (which also block out the deep reds) with a special filter to permit near infrared photography. Thus the reds you see here that most cameras won’t capture. You can buy fully modified Canon 5D cameras, ready for astrophotography, from here.
Here are the technical specifics by William Castleman:
The time-lapse sequence was taken with the simplest equipment that I brought to the star party. I put the Canon EOS-5D (AA screen modified to record hydrogen alpha at 656 nm) with an EF 15mm f/2.8 lens on a weighted tripod. Exposures were 20 seconds at f/2.8 ISO 1600 followed by 40 second interval. Exposures were controlled by an interval timer shutter release (Canon TC80N3). Power was provided by a Hutech EOS203 12v power adapter run off a 12v deep cycle battery. Large jpg files shot in custom white balance were batch processed in Photoshop (levels, curves, contrast, Noise Ninja noise reduction, resize) and assembled in Quicktime Pro. Editing/assembly was with Sony Vegas Movie Studio 9.
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Filed under: Life, the Universe and Everything, The Long Now Foundation
Long Now Media Update

The latest Seminars About Long-term Thinking are now available as audio downloads or podcasts and in hi-res video for Long Now members.
*Michael Pollan on “Deep Agriculture” – video now available
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Filed under: Life, the Universe and Everything, The Long Now Foundation
Maker Faire Bay Area 02009
The 4th Annual Maker Faire takes place this year on Saturday May 30th and Sunday the 31st at the San Mateo Fairgrounds and Long Now is thrilled to be an exhibitor for the third year running.
Maker Faire is an incredible experience for the whole family with exhibits ranging from gigantic Tesla coils to small steam driven robots to extreme crafting. Workshops, panels, live music, outdoor games, a craft market and the science pavilions are just some of the things you’ll encounter over this weekend.
Long Now is going to be bringing the full-sized Geneva wheel to Maker Faire! This is the first time we’ll be showing this piece to the public. We’ll also have other small prototypes and the Rosetta Disk on display.

We’ll be at booth #104 in the Expo Hall, so stop by and say hello if you’ll be attending.
A word to the wise – there were so many attendees at last year’s Maker Faire (over 60,000) that the highway exit for San Mateo became clogged and some people were stuck for hours in the traffic before getting in to the fairgrounds. Public transportation, on the other hand, flowed fluidly and using it this year is highly recommended.
You’ll want tickets and directions. See you there!
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Filed under: Life, the Universe and Everything, The Long Now Foundation

