Quantum Night

Quantum Night

By Robert J. Sawyer

“A real psychopath looks at you not just without blinking much – although that certainly adds to the reptilian effect – but also without performing microsaccades.”

Heather had heard me talk about them before. Microsacades are involuntary jerks as the eyeball rotates two degrees or less; they occur spontaneously whenever you stare at something for several seconds. Their purpose is debated although the most common theory is that they cause the neurons perceiving an object to refresh so that the image doesn't fade.

Heather's eyebrows rose above her wire-frame glasses. “Really?”

I nodded. “You. The paper's coming up in Nature Neuroscience.”

“Way to go!” But then she frowned. “Why would that be, though?” What have microcascades go to do with psychopathy?”

“I'm not sure,” I admitted, “but I've demonstrated the lack in forty-eight our of fifty test subjects, all of whom had scored thirty-two or above on the PCL-R.”

“What about the other two?”

“Not psychopaths; I'm convinced of it. And that's the problem with the PCL-R: it's not definitive. Bob Hare got pissed several years ago when a pop-sci book called The Psychopath Test came out. It implied anyone could properly assess whether their neighbors or bosses or even casual acquaintances were psychopaths. As Hare said, it takes a week of intensive training to be able to score his twenty variables properly, and that's on top of formal psychological or psychiatric education. But his test can have false positives if a clinician miscategorizes something, or assigns a score of two when only a one is really warranted – or if the psychopath is good at evading detection.”

Psychotic Night. Illustration by Elena.

… It's more than that, I said. You know, a lot of the world's most-cutting-edge work in psychopathy has been done here in Canada... which says something, I'm sure. Not only is Bob Hare Canadian – he's emeritus now at UBV – but so is Angela Book. She published a study in 2009 called “Psychopathic Traits and the Perception of Victim Vulnerability.” That study and subsequent ones have shown that psychopaths have an almost preternatural ability to target already wounded people.

In one of my own experiments I made high-resolution videos of a group of female volunteers, some of whom had been assaulted in the past and some of whom hadn't, milling about in a room with some male grad students. I then showed the footage to a group of men, asking them to pick out which females had been previously assaulted. For normal men, the success rate was no better than chance: they simply couldn't tell and so just guessed. But the psychopaths averaged eighty percent correct.

When I asked the psychopaths how they could tell, their answers ranged from the not-very-helpful “it's obvious” to the significant “I can see it in their faces”. And apparently they could. Human faces are in constant, subtle motion, exhibiting fleeting microexpressions that last between a twenty-fifth and a fifteenth of a second. When a psychopath turns on the microexpressions stare, free of microsaccades, he can clearly see ever-so-brief look of fear might pass over their faces when a man looks at them, and not only  do the psychopaths notice it, but they gravitate toward those exhibiting such things.

How precisely does the method work? How the test is conducted?

Microsaccades are a fixational eye movement – they occur only when your gaze is fixed on something. And to get a really solid, really good track, doctors normally use film.  Rather, they use a modified set of ophthalmologist's vision-testing goggles. I get the suspected psychopath to wear them and simply ask him or her to stare for ten seconds at a dot displayed by the googles. Sensors check to see if the eyes stay rock-steady or if they jerk a bit. If the former, the guy's a psychopath, I guarantee it. If the latter – if the subject is performing microsaccades – he isn't. You can't fake microsaccades; the smallest volitional eye shift anyone can do is much bigger. As long as the person doesn't have an eye-movement disorder, such as congenital or acquired nystagmus, which would be obvious before you did the test, with my technique, there are no false positives. If the doctor says you're a psychopath, you bloody well are.

Dismissal of Charting

Dismissal of Charting

Appraising the Counterattack

As you might imagine, the random-walk theory’s dismissal of charting is not altogether popular among technicians. Academic proponents of the theory are greeted in some Wall Street quarters without enthusiasm. Technical analysts consider the theory and its implications to be, in the words of one veteran professional, “just plain academic drivel.” Let us pause, then, and appraise the counterattack by beleaguered technicians.

Perhaps the mots common complaint about the weakness of the random-walk theory is based on a distrust of mathematics and misconception of what the theory means. “The market isn’t random,” the complaint goes, “and no mathematician is going to convince me it is.” Even so astute a commentator on the Wall Street scene as “Adam Smith” displays this misconception when he writes:

I suspect that even if the random walkers announced a perfect mathematic proof of randomness I would go on believing that in the long run future earnings influence present value, and that in the short run the dominant factor is the elusive Australopithecus, the temper of the crowd.

Of course earnings and dividends influence market prices, and so does the temper of the crowd. But, even if markets were dominated during certain periods by irrational crowd behavior, the stock market might still well be approximated by a random walk. The original illustrative analogy of a random walk concerned a drunken man staggering around an empty field. He is not rational, but he’s not predictable either.

Moreover, new fundamental information about a company (a big mineral strike, the death of the president, etc.) is also unpredictable. It will occur randomly over time. Indeed, successive appearances of news items must be random. If an item of news were not random, that is, if it were dependent on an earlier item of news, then it wouldn’t be news. The weak form of the random-walk theory says only that stock prices cannot be predicted on the basis of past stock prices. Thus criticisms of the type quoted above are not valid.

The High Park contains Toronto`s largest pond and approximately 110 acres of remnant oak woodland communities, once common on the Great Lakes sand plains. Photo by Elena

The technical analyst will also cite chapter and verse that the academic world has certainly not tested every technical scheme that has been devised. That is quite correct. No economist or mathematician, however skillful, can prove conclusively that technical methods can never work. All that can be said is that the small amount of information contained in stock-market pricing patterns has not been shown to be sufficient to overcome the brokerage costs involved in acting on that information. Consequently, many condemn the author for not mentioning in the earlier editions of these texts, a pet technical scheme that the writer is convinced actually works.

Being somewhat incautious, the author will climb out on a limb and argue that no technical scheme whatever could work for any length of time. I suggest first that methods which people are convinced “really-work” have not been adequately tested; and second, that even if they did work the schemes would be bound to destroy themselves.

Each year a number of eager people visit the gambling parlors of Las Vegas and Atlantic City and examine the last hundreds of numbers of the roulette wheel in search of some repeating pattern. Usually they find one. And so they stay until they lose everything because they do not retest the pattern (Edward O. Thorp actually did find a method to win at blackjack. Torp wrote it all up in Beat the Dealer. Since then casinos switched to the use of several decks of cards in order to make it more difficult for card counters, and as a last resort, they banish the counters from the gaming tables.) The same thing is true for technicians.

If you examine past stock prices in any given period, you can almost always find some kind of system that would have worked in a given period. If enough different criteria for selecting stocks are tried, one will eventually be found that selects the best ones of that period.

Let me illustrate. Suppose we examine the record of stock prices and volume over the five-year period 1985 through 1989 in search of technical trading rules that would have worked during that period. After the fact it is always possible to find a technical rule that works. For example, it might be that you should have bought all stocks whose names began with the letters X or I, whose volume was at least 3,000 shares a day, and whose earnings grew at a rate of 10 percent or more during the preceding five-year period. The point is that it is obviously possibly to describe, after the fact, which categories of stocks had the best performance. The real problem is, of course, whether the scheme works in a different time period. What most advocates of technical analysis usually fail to to is to test their schemes with market data derived from periods other than those during which the scheme was developed.

Even if the technician follows my advice, tests his scheme in many different time periods, and finds it a reliable predictor of stock prices, I still believe that technical analysis must ultimately be worthless. For the sake of argument, suppose the technician had found that there was a reliable year-end rally, that is, every year stock prices rose between Christmas and New Year’s Day. The problem is that once such a regularity is known to market participants, people will act in a way that prevents it from happening in the future (if such a regularity was known to only one individual, he would simply practice the technique until he had collected a large share of the marbles. He surely would have no incentive to share a truly useful scheme by making it available to others.

Any successful technical scheme must ultimately be self-defeating. The moment I realize that prices will be higher after New Year’s Day than they are before Christmas I will start buying before Christmas ever comes around. If people know a stock will go up tomorrow, you can be sure it will go up today. Any regularity in the stock market that can be discovered and acted upon profitably is bound to destroy itself. This is the fundamental reason why I am convinced that no one will be successful in employing technical methods to get above-average returns in the stock market.

Burton G. Malkiel. A Random Walk Down Wall Street, including a life-cycle guide to personal investing. First edition, 1973, by W.W. Norton and company, Inc.

Implications for Investors

Implications for Investors

The past history of stock prices cannot be used to predict the future in any meaningful way. Technical strategies are usually amusing, often comforting, but of no real value. This is the weak form of the random-walk theory, and it is the consistent conclusion of research done at universities such as Chicago, M.I.T., Yale, Princeton, and Stanford. It has been published mainly in investment journals, but also in more esoteric ones such as Kyklos and Econometrica. Technical theories enrich only the people preparing and marketing the technical service or the brokerage firms who hire technicians in the hope that their analyses may help encourage investors to do more in-and-out trading and thus generate commission business for the brokerage firm.

The implications of this analysis are simple. If past prices contain no useful information for the prediction of future prices, there is no point in following any technical trading rule for timing the purchases and sales of securities. A simple policy of buying and holding will be at least as good as any technical procedure. Discontinue your subscriptions to worthless technical services and eschew brokers who read charts and are continually recommending the purchase or sale of securities.

There is another major advantage to a buy-and-hold strategy that I have not yet mentioned. Buying and selling, to the extent that it is profitable at all, tends to generate capital gains, which, in the late 1980s, were taxed at regular income-tax rates. Buying and holding enables you to postpone or avoid gain taxes. By following any technical strategy, you are likely to realize most of your capital gains and pay larger taxes (as well as paying them sooner) than you would under a buy-and-hold strategy. Thus simply buying and holding a diversified portfolio suited to your objectives will enable you to save on investment expense, brokerage charges, and taxes; and, at the same time to achieve an overall performance record at least as good as that obtainable using technical methods.

Burton G. Malkiel. A Random Walk Down Wall Street, including a life-cycle guide to personal investing. First edition, 1973, by W.W. Norton and company, Inc.

Implications for investors. Photo by Elena.

Europe in 1970 – 1995

Europe in 1970 – 1995

Can Europe Get It Together?

With the fall of the Berlin wall, Germany is unified. Is Europe next? It is no real surprise, given the relatively short time since democracy swept over Eastern Europe, that Western Europe remains the continent’s economic power. But even in the poorer eastern countries, literacy rates are high, and life expectancy hovers around 70 or above.

For the last quarter century (1970 – 1995), the search for European unity and the failure of communism in the Eastern Bloc nations have shaped European politics. Economically, the continent is more united than ever. The 1993 enactment of the Maasstricht Treaty for European Unity was a giant step forward, making it easier to transport produce and manufactured goods across national borders.

Political union is proving more elusive, however. The fall of communism has been a boon to Eastern Bloc countries such as Poland and Hungary. But elsewhere the glue of communism has given way to chaos. The civil war ravaging the former Yugoslavia has proved a Gordian knot for European diplomats, who have been unable to agree on any plan – military or diplomatic – to stop the carnage. Commentators say that the continent’s multi-ethic, multicultural makeup makes continued factional violence almost inevitable.

Inside Europe today: The tiny state of San Marino has been independent since 301; the Czech Republic gained its independence in 1993. A lot of history lies in between. The people of Europe speak nearly as many language as there are countries on the continent. Christianity, the continent’s dominant religion, serves as a common thread.

European ladies. Photo by Elena

1970 – Food Riots Plague Poland : Price increases on meat products spur widespread unrest. Riot in Gdansk soon spread to neighboring cities. The government responds to riots in Szczecin with tanks. Ten days after the price increases are instituted, the party reshuffles its leadership and declares food prices frozen for two years.

1972 – 74 – Britain Occupies Northern Ireland: Severe civil unrest leads the British government to assume direct rule over Northern Ireland and suspend the constitution. British Prime Minister Edward Heath declares that British forces will remain in Northern Ireland until innocent people are no longer terrorized by extremist Catholics or Protestants.

Increased terrorist attacks in England by the Irish Republicn Army (IRA), trigger the British Parliament to pass the Prevention of Terrorism Act, which gives police added powers of arrest, detention, and expulsion. The new Law also bans the IRA and forbids the wearing of any IRA symbols as the black beret.

1977 – 78 – Italy Breaks from Vatican: Italian authorities and the Roman Catholic Church agree to end the classification of Roman Catholicism as the national religion. The agreement revokes the status granted the church in 1929 by Benito Mussolini.

In 1978, controversial legislation allowing free abortion on demand to women over 18 becomes law in Italy. Some Roman Catholic doctors take advantage of a special clause allowing the to opt out of the new plan onn grounds of conscience.

1980 – Yugoslavia’s Tito Dies: When Yugoslavia’s strong leader Marshal Tito dies in May, commentators speculate about how the multi-ethnic, autonomous communist state will survive without him. By the early 1990s, ethnic difference prove too strong, resulting in bloody wars and the break up of the country into Bosnia and Herzegovina, Croatia, Serbia and Montenegro, Slovenia, and the Former Yugoslav Republic of Macedonia.

1981 – France Elects a Socialist President: Marking a major turning point in French history, François Mitterrand becomes the nation’s 21st president and the first socialist president ever to be elected by universal suffrage. During Mitterrand’s first year in power, the National Assembly abolishes the death penalty, decreases the number of nuclear power plants to be built in France, and votes to nationalize major industries, private banks, and two finance companies.

1983 – Greens Rally in Germany: Antinuclear advocates stage massive demonstrations in West Germany to protest the imminent arrival of Pershing II missiles from the United States. In Bonn, a human chain links embassies of the major nuclear powers – the United States, the Soviet Union, the United Kingdom, China, and France. By the end of the year, nine missiles are operative.

1989 – The Berlin Wall Falls: Mass demonstrations calling for political change and the huge number of East Germans trying to flee the country finally force East German authorities to open the Berlin Wall on November 9. “For 28 years since the wall was built we have earned for this day,” says Walter Momper, the mayor of West Berlin.

1990 – Communists Lose in Czechoslovakia: Following 1989’s “velvet” revolution, parliamentary elections give the largest voting block to Civic Forum, the leader of the revolution, and its Slovak equivalent, Public against Violence. The communist party is left with only 47 of de Federal Assembly’s 300 seats. Together with new President Vaclav Havel, the government begins planning the move to a market economy through privatization and price liberalization. The human rights situation has improved dramatically, but there are still concerns about the treatment of Gypsies.

1994 – Russia: Symbolic and legislative progress in 1994 was overshadowed by concerns about appalling prison conditions, abuses of military draftees, and state-sponsored ethnic and gender discrimination.

Federal Republic of Yugoslavia: Human rights conditions continued to deteriorate in the remains of Yugoslavia, comprising Serbia and Montenegro. Continued oppression against Sandzak Muslims and Kosovo Albanians continued, contradicting Serbian President Slobodan Milosevic’s claim that “ in Serbia there is no policy of ethnic discrimination.”

1994 – War in Bosnia and Herzegovina: The gruesome war between Bosnian Muslims and Serbs continues, with Serbs perpetrating bulk of the atrocities. Abuses against Bosnia’s three ethnic groups – Muslims, Serbs, and Croats – continue but the overwhelming majority are still perpetrated by Bosnian Serbs. Most of these abuses are associated with “ethnic cleansing,” whose main objective is the removal of an ethnic group from a given area through murder, population exchanges, forced displacement, and terrorization.

1994 – Croatia: There were some human rights improvements in 1994, but the government continues to evict persons living in housing formerly owned by the Yugoslav army and to impede the functioning of a free press.

1994 – Albania: The country has undergone radical change since democratic reforms began in 1990. But there are still serious human rights abuses.

Europe:

Largest Lake – Ladoga, European Russia, 7,100 square miles.

Longest River – Volga, European Russian, 2,290 miles.

Highest Point – Elbrus, Caucasus, European Russia, 18,510 feet.

Lowest Point – Volga Delta, Caspian Sea, European Russia, 92 feet below sea level.

Largest City – Moscow, European Russia, about 10 million.

The Middle East

The Middle East

in 1967-1995

In 1967 few would have believed that in 1995 Israeli leaders and Palestine Liberation Organization leader Yasir Arafat would be charting a program for peace. Arafat, once a brutal terrorist responsible for bombings of innocent civilians, is now regarded, albeit warily, as the legitimate representative of the Palestinian people. The City of Jericho on the West Bank and the Gaza Strip are under Palestinian control and more should follow. Many hurdles still remain, but the Arabs and Jews are closer to a comprehensive settlement of their differences than at any time since Israel became a state in 1948.

Elsewhere in the Middle East, Islam – a way of life as well as a religion – is newly resurgent. In Iran, Iraq, and other Arab states, autocratic leaders fuse Islam with government, Women are accorded few rights. Rulers go to considerable lengths to shield their citizens from “immoral” Western influences. Vast reserves of oil fuel the region’s economies and keep the rest of the world responsive to Arab interests.

1967 – The Six-Day War: The third Arab-Israeli war since 1948. After Nasser imposes a blockade on Israeli shipping in the Straits of Tiran, Israel attacks Egypt, Syria, and Jordan simultaneously. When the war ends, Israel occupies the Sinai Peninsula, the Golan Heights, the Old City of Jerusalem, the Gaz Strip, and the West Bank, all of which had previously been under Egyptian or Jordanian control.

The UN Security Council unanimously adopts Resolution 242, denouncing the acquisition of territory by war but does not insist on any specific terms for the withdrawal of Israeli forces.

1969 – Yasir Arafat takes over the PLO: Arafat, then the leader of the al-Fatah guerrillas, is elected chairman of the Palestinian Liberation Organization’s (PLO) executive committee. Former Egyptian President Gamal Abdel Nasser had led Arab leaders in creating the PLO five years earlier.

1970 – The PLO Is Expelled from Jordan: King Hussein defeats PLO leader Yasir Arafat’s guerrillas and expels the PLO from his territory. PLO headquarters move from Jordan to Lebanon.

A Middle-Easterner Lady. Photo by Elena.

1970 – Terror in the Sky: The Popular Front for the Liberation of Palestine, a radical Palestinian group, attempts to hijack four passenger planes over western Europe. The skyjacking of a New York-bound El Al plane fails, but a Pan Am plane is taken to Beirut and then Cairo. Three other flights are diverted to an unused airstrip in the Jordanian desert and demands are made for the release of Palestinians detained in Israel, West Germany, Britain, and Switzerland. The plane’s passengers are released eventually, but the planes are destroyed.

1972 – Murder at the Olympics: During the Munich Olympic games, Palestinian guerrillas capture Israeli athletes and call for release of Palestinians held by Israeli police. After promising the terrorists safe passage out of the country, West German police open fire at the Munich airport, leading the gunmen to kill all of the hostages. Israel responds with bombing raids in Lebanon.

1973 – the Yom Kippur War: The fourth Arab-Israeli war breaks out when Syria and Egypt attack Israeli forces in the Sinai and the Golan Heights on the Jewish Day of Atonement. Israel dries back enemy forces, but the initial successes of the Arab forces demonstrate that they have dramatically strengthened their military might in the six years since the previous war.

1973 – the Arab Oil Embargo: Arab oil-producing countries impose an oil embargo on Israel during the Yom Kippur War and agree to cut production 5 percent each month until Israel withdraws from occupied lands and restores “Palestinian rights.” They also cut exports to nations that are sympathetic to Israel, including the United States. Oil prices skyrocket and many industrialized countries restrict fuel usage.

1977 – Sadat in Jerusalem: Speaking to the Israeli Knesset in Jerusalem, Egyptian President Anwar Sadat proposes peace with Israel in exchange for the withdrawal of Israeli forces from the Sinai Peninsula.

1978 – The Camp David Accords: U.S. President Jimmy Carter finally hammers out a settlement between Israeli Prime Minister Menachem Begin and Egyptian President Anwar Sadat in which Israel recognizes the Palestinian people’s right of self-determination and agrees to withdraw its forces from the Sinai Peninsula in exchange for peace. Egypt and Israel establish formal diplomatic relations for the first time. In protest, the Arab League moves its headquarters from Cairo to Tunis.

1979 – Revolution in Iran: The pro-American regime of Shah Mohammed Reza Pahlavi falls as a result of widespread political dissent. Soon after the shah’s departure, the Ayatollah Ruhollah Khomeini, previously in exile, establishes an Islamic republic. Under the new constitution, final authority over all legislation and command of the armed forces are vested in the faqih, the primary theologian in the country – in this case, Khomeini.

1979 — 81 – America Held Hostage: Muslim extremists seize the U.S. Embassy in Tehran after the United States refuses to extradite the shah, who has received a death sentence from new Iranian leader Ayatollah Ruhollah Khomeini. The last 52 hostages are released on January 20, 1981, after 444 days in captivity.

1981 – Sadat is Assassinated: The Egyptian president is gunned down by Muslim extremists at a military parade in Cairo.

1982 – Israel Invades Lebanon: To stop PLO guerrillas from mounting raids into Israel, Israeli forces bomb Beirut from land, sea, and air for nearly two months. The PLO finally agrees to leave. In 1985, Israeli troops withdraw from most of Lebanon.

1983 – 81 – U. S. Marines Die in Beirut: At a U. S. Military compound in Beirut, 239 U. S. Troops die when an Arab extremist drives a truck wired with explosives through the gates. Soon after, U. S. troops are withdrawn.

1986 – United States Bombs Libya: U. S. Bombers raid Tripoli and Benghazi in response to Libya’s alleged involvement in terrorist attacks in Europe. Civilian and military casualties are estimated at about 130 and include Libyan leader Mu’ammar al-Quaddafi’s adopted daughter.

1987 – The Intifada Begins: A Palestinian uprising protesting Israeli rule begins in the occupied territories. Riots continue through 1990. Attempting to contain the protests in which troops and police ar attacked by rock-throwing mobs, Israeli forces use arrests, beatings, deportations, and curfews.

1990 – 91 – Operation Desert Storm: Iraq invades and occupies Kuwait in August 1990. In January 1991, a U.S. – led Western alliance launches Operation Desert Storm to expel the Iraqi invaders from Kuwait. More than half a million U. S. Troops are involved in the action, which succeeds in expelling the Iraqis from Kuwait, but Iraqi ruler Saddam Hussein remains in power.

1993 – Israel and the PLO Sign Pact: In Washington, D.C., Israel and the PLO sign the Declaration of Principles on Palestinian Self-Rule in the Occupied Territories. Both parties officially recognize each other.

1994 – The PLO Takes Over: A transfer of power from Israel to Palestinian authorities begins in the town of Jericho and much of the Gaza Strip. But violence continues, as a radical Jewish settler who opposes the peace agreement murders 29 Palestinian worshipers at a Hebron mosque with an army-issued automatic rifle. Palestinians respond with protests and random attacks against settlers.

The Middle East

    Largest Lake – Caspian Sea, Iran, Turkestan, 143,205 square miles.

    Longest River – Euphrates. Syria, Iraq, 1,750 miles.

    Largest Country – Saudi Arabia. Over 95 percent desert. 830,001 square miles.

    Largest point – Dead Sea. Israel, Jordan, 1,286 feet below sea level.

    Largest city – Istanbul, Turkey, 9 million pop.