Complexity Economics

Just How Healthy is the US Economy?

We know that 2013 has been a great year for stock markets, US markets in particular. People are openly talking of “stock market recovery”. We also know that the FED has been pumping paper into the system. But what has this really done to the economy, apart from increasing the values of market  indices?

Since Nature offers no free lunch (the economy probably doesn’t either) printing money must have its consequence. If you make markets rally based on steroids you inevitably end up paying for it somewhere. We claim that such policies create fragility. Hidden fragility. Well, hidden to conventional pre-crisis analytics technology and to those that are concerned with numbers and numbers alone.

Assetdyne analyzes the major US markets every two weeks and publishes the results here. The focus of the analyses is resilience – the capacity to resist impacts, shocks, contagion, extreme events and, ultimately, sustained turbulence. The results are far from exciting, revealing mediocre levels of resilience. Here they are:

NASDAQ 100 – NDX

S&P 100 – OEX

Dow Jones Composite Average – DJA

Dow Jones Industrial Average – DJI

PHLX Semiconductor – SOX

A two to three-star resilience rating. Nothing to celebrate. The S&P 100, in particular, has an alarming two-star (64%) rating. We leave the comments to the readers.

Navigate Interactive Complexity Maps of the indices here. Just click on an index and move the mouse. More soon.

www.assetdyne.com

Established originally in 2005 in the USA, Ontonix is a technology company headquartered in Como, Italy. The unusual technology and solutions developed by Ontonix focus on countering what most threatens safety, advanced products, critical infrastructures, or IT network security - the rapid growth of complexity. In 2007 the company received recognition by being selected as Gartner's Cool Vendor. What makes Ontonix different from all those companies and research centers who claim to manage complexity is that we have a complexity metric. This means that we MEASURE complexity. We detect anomalies in complex defense systems without using Machine Learning for one very good reason: our clients don’t have the luxury of multiple examples of failures necessary to teach software to recognize them. We identify anomalies without having seen them before. Sometimes, you must get it right the first and only time!

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