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Tracing the Financial Meltdown of 2008-9

Tracing the Financial Meltdown of 2008-9

Tracing the 2008-2009 Financial Meltdown Through a Metastable Phase Space We can trace a path through the phase space shown in Figure 1 that shows the same kind of behavior as the financial world went through during the 2008-2009 meltdown. Figure 1 shows a “path” going from a low-active state to a high-active state (3) back to low-active state (7) again. (To be continued)

Modeling a Financial Meltdown Using Metastable State Phase Transitions

Modeling a Financial Meltdown Using Metastable State Phase Transitions

Modeling the 2008-2009 Financial Meltdown Using Metastable State Phase Transitions Now that we’ve weathered the crisis of 2008-2009, we can prudently ask ourselves: “What are the warning signs of imminent meltdown? How can we predict – and act prior to – a major market collapse?” This post continues the theme begun in the previous post, of playing with a not-quite Gedanken experiment; looking for a useful model that explains what happened with the U.S. financial system at the end of…

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Modeling a Financial Nonlinear Phase Transition

Modeling a Financial Nonlinear Phase Transition

A disclaimer. Before you (or I) go any further with this, an upfront and blanket disclaimer. This is not a real, true, serious modeling effort. It is not even a true gedanken-experiment (German for “mental experiment,” or mental walk-through.) If anything, this is a little warm-up exercise. An attempt to stretch and flex some “modeling muscles” that have not been used for a couple of years. (And in good cause, I might add – I’ve just completed a book, see…

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Non-Equilibrium Theory: Basic References

Non-Equilibrium Theory: Basic References

Core References for Non-Equilibrium Theory, and Initial Discussion on Financial Meltdown of 2008-2009, Lehman Brothers, Examples of Webposts Increasing over Time Gathering up two of the most classic sources: Prigogine’s Thermodynamics of Irreversible Processes , and Kubicek and Marek’s Computational Methods in Bifurcation Theory and Dissipative Structures. So here’s an interesting little do-at-home experiment: Study the meltdown of the Lehman Brothers, which started the whole stock market runoff in September / October of 2008. Using Google (which is a horrible…

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