Societe Generale and the joys of a chaotic networked world....

Friday, January 25. 2008

Societe Generale and the joys of a chaotic networked world....

In highly interlinked complex systems, a butterfly flaps its wings and therefore a tornado hits Kansas....

In 2007, the highly interlinked global financial systems allegedly means that a French trader drops a £3.5bn wad (that could only have been built up via electronic trading - and extraordinary banking laxity, despite the Leeson lessons) and the US drops its interest rate more sharply than they have for 25 years.

I wonder if we will see more of these sorts of "phase change" behaviours of systems as they become more complex, and possibly take on chaotic (in the mathematical sense) properties. Maybe its possible to be a bit too interlinked? The benefits are we get the wisdom of crowds, the risk is we get the madness.

Posted by Alan Patrick in Hackers and Startups at 22:42 | Comments (0) | Trackbacks (0)

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