Black Monday Murders

[JKtheMac]

We certainly seem to be into a new chapter for this book now, and it is certain to start escalating from here. If it is structured as a medium length story we are into rising action and would expect a climax in four or so issues by my gut feeling, so 12 still looks likely given the density of material.

[OceanMachine]

Here's something else that I just came across: Gaddis realizes before he gets eaten that the one outlying crash (the one Mammon didn't cause) was in 1987. According to Wikipedia, IRL that particular crash is also the one that is primarily referred to by the nickname "Black Monday." It also remains, "the largest one-day percentage decline in the DJIA [Dow Jones]." So if we didn't already realize that this particular crash is key, well...it looks like the series is named after it.

[Abe]

Black Monday : 19th of October 1987 - 30 years today!

[JKtheMac]

I guess on one level the use of magic in this book could be seen as a critique of how algorithms have slowly but surely taken over the market. Indeed many think Black Monday was partly an accident caused by the automated 'portfolio insurance' algorithm which was designed to offset losses in large investment portfolios in a time of 'sell-off'. In other words the computer algorithms designed to protect the largest investors perpetuated and exacerbated the drop in price to cause the biggest one-day drop in history.

The algorithm was designed to sell futures as an offset, but smaller investors could see no reason to buy low price stock when the futures market was also depressed. For a short while it looked to everyone like a depression. The market had actually fully recovered within a year, and people could have made a lot of money buying stock, but nobody could perceive this possibility and for short and medium term investment selling now was better than selling twenty minutes later when the price had gone down, and potentially (according to the futures market) showed no sign of recovery.

If you then overlay a conspiracy theory onto this you could posit that this computer algorithm actually accelerated the use of computer algorithms in the market. Many computerised systems were put in place to stop this kind of sudden and relentless drop in price. Mainly pausing and then stopping the trade in stock. However stock can now be traded much faster now, and is very often done using algorithms.

Numerology is a good analogy for algorithmic systems.

Add to this that 'games theory' which has some serious flaws in its methodology, dominates economic thinking and therefore the algorithms that are used in the market, and one could make a claim that algorithms are artificially controlling the market.

The idea that the 'market gods' can no longer see the actions of their followers also mirrors the way that the algorithms used by traders are naturally trade secrets. Algorithms represent an added layer of abstraction overlaying the already rarified world of the economic theories of the stock market. A world that does indeed tend to think of money and its value in the abstract rather than as a collective will of real people taking very real human risks.

[Abe]

That's very interesting JK. Thanks to share your thoughts!

[JKtheMac]

That's very interesting JK. Thanks to share your thoughts!

You know me, I can't resist a theory.

[OceanMachine]

Yeah, thanks JK. I'm not too educated where high finance is concerned, so those were some interesting new points to ponder.

[TotalSnorefest]

Good stuff JK! I don't have any insights myself regarding algorithms in finance, since most stock-market terms sound like magic spells to me, but I feel like I've learned a bit from your post.

[Abe]

Time to bump up the thread I guess.

Great issue. Won't spoil anything but I can't wait for the next story arc!

[OceanMachine]

Woah. Pretty cool! Not what I was expecting to happen at all. And also really opens the door to potential further arcs in the future.

[seismic-2]

Ria really pulled out all the stops in settling accounts. This had been mentioned in a previous issue as an option, but I didn't expect it to come to this. Now, what should we make of the fact that the final scene in this issue takes place on "November 31"?

[son of booyah]

Here's to hoping that this book continues for a while, this issue sets up a lot of possibilities at least. Good stuff, the turn with Dumas was cool

[JKtheMac]

Sometimes you wait for something you once enjoyed and it resumes just as it was before. You note how much you missed it and you carry on as if it had never been away.

Sometimes you wait for something and when it returns it does so with a rush. It explodes in front of you, opens into a myriad of possibilities and you realise it was always more. You didn't just enjoy it, you loved it.

This issue was utterly amazing. Not because it really did anything original. This was very much a set-up issue. A transition. A step over the threshold into a domain only glimpsed from outside. Three things happened, a magical duel, a request for membership and the recalling of an old ally, really nothing much. But the art was stunning, the dialogue was properly observed like a ritual in story form, and the sudden introduction of the world map accepted us into the wider world that we had no real knowledge of previously.

Now we have context. Now we recognise the war between the two forces we have seen up until now was just a battle in a wider conflict. That this ritual interaction between two factions is but an example of the way these interactions work on multiple fronts concurrently. It was an ancient and complex interaction but it wasn't unique or special.

What happens now? A way of thinking about money and power has just been defeated by another one. Does that defeated way disappear, wiped from the map? Does it become like 'The lost Schools of the Wastelands' and stop interacting? Does it somehow become subsumed into the victor's domain, with a puppet ruler? Does it slink away and brood, retaining its identity but no longer acting significantly on the world stage.

I have no idea and that is why I loved this issue.

[JKtheMac]

Some economists look at Russia and see America in the early days.

They see the way power and ownership of resources and infrastructure has been accrued into a few partly criminal, powerful groups. They look at how the poor were given stocks in the country but were economically forced to sell them cheap in order to live. This resulted in powerful groups, loosely tied together by mutual wealth and oligarchy. These 'optimistic' economists compare this to the gangs and mobs of a past US age. They remember how this black economy slowly legitimised itself.

They project a future where Russia slowly legitimises its money, because that way they can expand and take a place in the wider world. It is happening fast. Vast amounts of money are being invested out of Russia into the wider world. This can be seen as insidious and scary because of who is doing the investing.

But, economic behaviour goes both ways. By investing in property and business abroad, Russia is normalising its economy and being encouraged to act in ways that the western markets find acceptable and non-threatening to the wider economy. Overt criminality is not rewarded by Wall-Street. As far as the monied of the west are concerned it is mutually beneficial for Russia to be just the same, for past dubious practices or even criminality to be forgotten as long as the future is not disturbed.

Here, in this issue, the beast of privileged, all-consuming greed, gangster economics has been literally slain by the west. That is clearly not the whole story, Hickman is probably not suggesting that the way of Wall-Street is the best or most desirable way of looking at money, but I think he may be reflecting these same themes.

[OceanMachine]

If nothing else, it's encouraging to see Hickman take some narrative steps that indicate the series will very likely be continuing into another arc (maybe more).

My number on question right now though -- where is Alexi? He's the only Kankrin member remaining. This is trouble, since he hasn't really got any allies in Caina (that we know of), and it also means that he will be perpetually in the stone chair. Which is of course...very bad news.