It sounds as though Mr. Burgis is sitting on a mountain someplace with his money tucked under his mattress and with little or not experience with the actual way some of his suggested solutions work in the real world. The reality is that when you are involved in a financial situation about which you have less than complete information whe…
It sounds as though Mr. Burgis is sitting on a mountain someplace with his money tucked under his mattress and with little or not experience with the actual way some of his suggested solutions work in the real world. The reality is that when you are involved in a financial situation about which you have less than complete information when getting involved, there is always a risk that as information becomes more available or changes, you will discover your risk of loss is much higher than originally contemplated and of a much larger amount. Sometimes, "panic" and "stampede" ARE the optimal solutions. Indeed, if they were not sometimes and possibly often the correct action at the individual level, they would not likely have evolved to be such a universal part of humanity. The financial situation at SVB had changed very much for the worst and what it sounds like Mr. Burgis would have liked to happen is that everyone simply kept pretending the Emperor was fully clothed. As to such mechanisms for "slowing" crowd responses (ostensibly to give people time to change their minds concerning their risk/loss analysis - he needs to take a much closer look at how "circuit breaker stop-trading rules" actually work in real life. Any competent trader in financial markets would explain that as prices fall towards so-called "circuit breaker" levels, traders and investors with positions are faced with the possibility of becoming locked-in during the stop-trading periods with the risk that the situation will worsen or that more damaging information will emerge and they will be unable to exit until trading resumes with the damaging situation being MORE widely known and facing a more concentrated and damaging selling wave than if they had simply exited before the circuit breakers were activated. In real life, as prices move closer and closer to circuit breaker price levels, the result is an ACCELERATION toward that price level, NOT a reduction of the pressure in that direction. In a world in which information dispersion is accelerated, one should NOT usually slow their response but rather the opposite - as well as trying to get information more quickly than competitors of course.
... "Sometimes, 'panic' and 'stampede' ARE the optimal solutions. Indeed, if they were not sometimes and possibly often the correct action at the individual level, they would not likely have evolved to be such a universal part of humanity."
On the contrary, the best survival chances are with those who can somehow _avoid_ and control a, yes, "natural", impulse to panic. In a panicked state, one loses the capacity to think clearly and one's reactions can easily contribute to greater, not lesser, danger and risk. So, from an evolutionary biology perspective, "panic" is not selected for in natural selection's work.. Those less inclined to panic have a greater likelihood to survive and, therefore, to reproduce.
The simple fact that we, this highly-evolved species, still know so much in tendencies to panic doesn't invalidate natural selection or "prove" that panic must be a positive survival trait. Any and all rudimentary traits shall survive to the extent that their manifestations are not _so_ deliterious as to be positively life-threatening--for it's only then that they're de-selected evolutionarily (and this is a generational-time-scale phenomenon, not a matter of weeks, months, years or decades). So there's room for traits which are anything from neutral to somewhat but not regularly fatal being passed down. (And all these factors are "environment specific". That is, yesterday's positive survival traits can gradually become negative if environment's conditions change and make them so. This is the most basic Darwinian evolutionary biology theory.) What does have a sound basis in evolution is the natural tendency to sense danger and the natural autonomic physiology which springs from it: widened pupils to enhance vision, a rush of adrenaline (in mammals) lending instant muscle power for flight or fight instincts. All of "panic"'s attendant physiological responses have some positive survival value--except paralyzing fear which also frequently accompanies panic.
It sounds as though Mr. Burgis is sitting on a mountain someplace with his money tucked under his mattress and with little or not experience with the actual way some of his suggested solutions work in the real world. The reality is that when you are involved in a financial situation about which you have less than complete information when getting involved, there is always a risk that as information becomes more available or changes, you will discover your risk of loss is much higher than originally contemplated and of a much larger amount. Sometimes, "panic" and "stampede" ARE the optimal solutions. Indeed, if they were not sometimes and possibly often the correct action at the individual level, they would not likely have evolved to be such a universal part of humanity. The financial situation at SVB had changed very much for the worst and what it sounds like Mr. Burgis would have liked to happen is that everyone simply kept pretending the Emperor was fully clothed. As to such mechanisms for "slowing" crowd responses (ostensibly to give people time to change their minds concerning their risk/loss analysis - he needs to take a much closer look at how "circuit breaker stop-trading rules" actually work in real life. Any competent trader in financial markets would explain that as prices fall towards so-called "circuit breaker" levels, traders and investors with positions are faced with the possibility of becoming locked-in during the stop-trading periods with the risk that the situation will worsen or that more damaging information will emerge and they will be unable to exit until trading resumes with the damaging situation being MORE widely known and facing a more concentrated and damaging selling wave than if they had simply exited before the circuit breakers were activated. In real life, as prices move closer and closer to circuit breaker price levels, the result is an ACCELERATION toward that price level, NOT a reduction of the pressure in that direction. In a world in which information dispersion is accelerated, one should NOT usually slow their response but rather the opposite - as well as trying to get information more quickly than competitors of course.
... "Sometimes, 'panic' and 'stampede' ARE the optimal solutions. Indeed, if they were not sometimes and possibly often the correct action at the individual level, they would not likely have evolved to be such a universal part of humanity."
On the contrary, the best survival chances are with those who can somehow _avoid_ and control a, yes, "natural", impulse to panic. In a panicked state, one loses the capacity to think clearly and one's reactions can easily contribute to greater, not lesser, danger and risk. So, from an evolutionary biology perspective, "panic" is not selected for in natural selection's work.. Those less inclined to panic have a greater likelihood to survive and, therefore, to reproduce.
The simple fact that we, this highly-evolved species, still know so much in tendencies to panic doesn't invalidate natural selection or "prove" that panic must be a positive survival trait. Any and all rudimentary traits shall survive to the extent that their manifestations are not _so_ deliterious as to be positively life-threatening--for it's only then that they're de-selected evolutionarily (and this is a generational-time-scale phenomenon, not a matter of weeks, months, years or decades). So there's room for traits which are anything from neutral to somewhat but not regularly fatal being passed down. (And all these factors are "environment specific". That is, yesterday's positive survival traits can gradually become negative if environment's conditions change and make them so. This is the most basic Darwinian evolutionary biology theory.) What does have a sound basis in evolution is the natural tendency to sense danger and the natural autonomic physiology which springs from it: widened pupils to enhance vision, a rush of adrenaline (in mammals) lending instant muscle power for flight or fight instincts. All of "panic"'s attendant physiological responses have some positive survival value--except paralyzing fear which also frequently accompanies panic.