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Life After the Oil Crash
Deal With Reality or Reality Will Deal With You
This month's issue of Vanity Fair has an article on Larry Fink, the CEO of the money management firm Blackrock (which I had never heard of before reading this article) and how their management of $12 trillion in taxpayer cash makes them the single biggest yet also most shadowy financial entity in the country:
Though few Americans know his name, Larry Fink may be the most powerful man in the post-bailout economy. His giant BlackRock money-management firm controls or monitors more than $12 trillion worldwide — including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year. Full Article
A bit later in the article, the company is described as the "Blackwater" of the financial world:
BlackRock’'s enormous and growing influence and its sheer size — too big to fail, some say — has begun to raise questions. "It’s like the Blackwater of finance, almost a shadow government," says one senior bank executive . . . Full Article
Probably the most interesting part of the article, at least to me, is buried about 3/4 of the way through where VF describes the vast and extremely sophisticated computer system that Blackrock is using to monitor the financial markets:
If the software can sift through $1.2 trillion in mortgage securities and provide "daily risk assessment reports" it can just as easily be tuned to sift through the phone calls, emails, and financial transactions of states, cities, neighborhoods, friend networks, even down to individual citizens and provide "risk assessment reports" on them as well. It could be used to monitor who might become a "terrorist" in the conventional sense of the word but more importantly who might be on the path to pulling their money out of the markets or downsizing their lifestyle.
It could also be used (I suspect it is) to monitor the net effect of certain websites or forums. To what degree, for instance, is a site like LATOC affecting the financial system or a particular entity's portfolio? In order to find out, all you'd need is the ip addresses of the 12,000 or so people who visit each day plus access to their financial transactions/portfolios to start to see some pattens.
"IP addresses are easy enough to get but how would they get my financial information?", you might ask. That's easy, they probably already have it. Think of all those times you hear or read news reports that "Bloated Banking Entity of the Day just lost the passwords of 600,000 customers" or "State University System of the Month lost a laptop that contained within it all the social security numbers of 50,000 alumini." My guess is all those "losses" of information get sold on the blackmarket to financial and/or intelligence entities who use the information to update their computer monitoring systems.
Armed with that information, you could aks the compute any number of questions:
"Are people who read LATOC more likely than others to buy gold within 6 months of first visiting the site?" (My guess is yes)
"How much gold are they buying?"
"Are they likely to sell their homes, mov to the country, to the city, drive less, buy less crap, pull out of the facebook/twitter industrial complex?"
"Just how much money has the site helped suck out of the system?"
A computer sophisticated enough and with access to enough information could come up with the answers to these questions (and orders of magnitude more useful information) pretty quickly.
In order to be able to truly appreciate the power (and sinister potential) of computer programs this powerful, I'd recommend reading through a couple articles. First, from Mike Ruppert:
. . . what would distinguish BlackRock was its state- of-the-art system for evaluating and managing risk. With 5,000 computers running 24 hours a day, overseen by a team of engineers, mathematicians, analysts, and programmers, BlackRock’s "computer farm" could monitor millions of daily trades and scrutinize every single security in its clients’ investment portfolios to see how they would be affected by even the most minor changes in the economy. Churning through 200 million calculations each week, its computers could simulate every imaginable shift in interest rates, every conceivable change in the financial markets, and stress-test the performance of hundreds of thousands of securities in numerous global-crisis scenarios.
With Aladdin, BlackRock Solutions’ 600 employees can evaluate a client’s holdings in a day, grinding through a $30 billion portfolio — as it did with Bear Stearns in March 2008. It can also manage a client’s portfolio long-term — as it is currently doing for the three investment vehicles (known as Maiden Lane I, II, and III) that hold the $130 billion of A.I.G. and Bear Stearns assets taken over by the New York Fed in the fall of 2008. For other clients — such as Fannie Mae, Freddie Mac, and the New York Fed’s $1.2 trillion in mortgage securities — it simply monitors the portfolio around the clock and can provide daily risk-assessment reports. BlackRock also "rents" the use of Aladdin to about 40 clients, providing them with all its services but still controlling the systems from its headquarters. It is through Aladdin that BlackRock effectively has an electronic eye on investments that amount to about $9 trillion worldwide . . . Full Article
. . . [this sort of software] combines datamining and artificial intelligence . . . Datamining is a technique for detecting and extracting meaningful patterns hidden within vast quantities of apparently meaningless data. Programs based on datamining are powerful analytical tools; finding meaningful patterns in an ocean of information is very useful. But when such a tool is driven by a high-caliber artificial intelligence core, its power gets spooky. The datamining capability becomes a smart search tool of the AI program, and the system begins to learn.
In recent decades, great strides have been made by the mutually fertile disciplines of mathematics, computer science, and neuroscience. Among the results has been a new discipline called cognitive neuroscience, which constitutes a powerful new understanding of the way the human brain works. This has applications so practical that they have reshaped our world. "Neural Network" programming is modeled on the computational techniques used by the human brain - an electrochemical computer that uses neurons instead of semiconductors; the firing or non-firing of neurons instead of ones and zeros.
With neural networking, software has become much smarter than it had been. Now it can perform multiple, related operations at the same time through parallel processing; now it can learn from setbacks, and use genetic algorithms to evolve its way out of limitations. This kind of computational power supports an inference engine that can digest the mined data into results that predictive for imminent and, to some degree, even middle -term outcomes. It extrapolates from current trends in a more than quantitative way.
Conventional electronic surveillance finds patterns in the data of other instruments; [this software] can exploit the patterns it detects and extrapolate future probabilities . . . Source
Also relevant would be a 2007 UK Register article which explains how the Pentagon and the Homeland Security now possess computer programs capable of modeling the decision making processes of financial institutions, media outlets, even the entire human population (all 6.6 billion of us) right down to individuals:
. . . the US Department of Defense may already be creating a copy of you in an alternate reality to see how long you can go without food or water, or how you will respond to televised propaganda.
Called the Sentient World Simulation (SWS), the program replicates financial institutions, utilities, media outlets, and street corner shops. By applying theories of economics and human psychology, its developers believe they can predict how individuals and mobs will respond to various stressors.
Yank a country's water supply. Stage a military coup. SWS will tell you what happens next. Homeland Security is already using SWS to simulate crises on the US mainland. Source
LATOC readers bought the following at Amazon:
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Great survival and disaster preparedness books:
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