Data Bubbles

“The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge.”
~ Daniel Bursting

By Catherine Austin Fitts

I was re-reading a chapter called “Information Overload” in James Montier’s The Little Book of Behavioral Investing. I have read it several times. I am confident I am going to read it again.

Montier describes two studies. The first is a group of bookmakers who were given data on past performance related to race horses. It turns out that the bookmakers were as accurate predicting with five pieces of data as with 40. However, the more data they had, the more confident they got. Their accuracy, however, did not improve. Similar patterns were discovered in an analysis of knowledgeable American college football fans. Whether six items of information or 30, their ability to predict outcomes did not improve, only their confidence. Increased information did, however, improve the ability of a computer to predict outcomes.

I was thinking about this because of the striking results of my latest reading binge. I travel a great deal and am known to be gone from my home base as long as two months at a time. When I get back, I can find myself with as many as 100 magazines and newsletters piled up in a large bucket I keep next to my Jacuzzi. Upon my return, I will head into the tub on the weekend for the kind of long bubble baths that only single people are likely to enjoy, while I read hundreds of pages of current news. I laugh, talk back to idiots, praise great authors and tear out pages representing the best links and nuggets for posting and comment on the blog or which inspire invitations for the Solari Report.

My latest mega media fest in the Jacuzzi was astonishing in the paucity of the resulting pile of torn out pages. I felt like I was wading through an endless thicket of greater and greater complexity on a surprisingly useless or narrow range of topics. It appears it is now only safe to rehash what everyone knows, or introduce things most of which we don’t need to have or know about or which promote central control under the guise of being new, cool and fashionable.

While it is far from running out of complexity, I wonder if the official reality is finally running out of gas.

If we only need five or six important and relevant data points to track the world around us, our challenge is that some of those data points are secret or rigged. More data on thousands more data points will not solve that problem.