Epsilon Theory: Two Discoveries

The world made two discoveries last week. Everyone is aware of the first discovery – that ISIS is not ‘a junior varsity team’ but an able protagonist in what Pope Francis quite rightly calls ‘a piecemeal third World War’. Very few are aware of the second discovery – the existence of a polynomial-time algorithm to determine whether two networks, no matter how complex, are identical. Both are watershed events, part of a continuing destabilization of politics and science. Neither will impact markets very much today. Both will change markets forever in the years to come.
I won’t say much about the first discovery here, but will take this opportunity to reprint a note I wrote in December 2014, eerily right before the Charlie Hebdo attack: ‘The Clash of Civilizations’. I’d also point out that the all-too-predictable Orwellian response to events like the Paris attack, namely to rewrite history and expand government monitoring of our private lives, is in full swing.
For example, here’s a before and after France Inter headline (hat-tip to Epsilon Theory reader M. O.), as noted by The Daily Telegraph. The headline as it originally ran a few weeks back calls a potential terrorist infiltration of Syrian refugees a ‘fantasy’ of the lunatic right. Immediately after the attack, the headline has been rewritten (and the body of the article partially rewritten as well), to suggest that of course one might question whether or not a few terrorists managed to sneak in with the refugees. France Inter – surprise! – is part of the state-owned media apparatus, now in full-throated advocacy for a ‘pitiless’ war.

This post was published at FinancialSense on 11/20/2015.