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Saturday I presented a paper on our research (1974-1999) at NJIT for
the occasion of the retirement of my mentors.
http://docs.google.com/Present?docid=dhnbrkcw_1pmtx37

While the presentation was well received, I neglected to present our
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work in risk management, which has become recognized as essential in
just about every application these days and in particular the
important ISCRAM initiative now being spearheaded by my mentors.
http://www.iscram.org/

( Fortunately it was covered in other presentations.
http://is.njit.edu/events/fest07/schedule.php )

A related issue, in my job hunt, I have found that I am limited in my
opportunities in financial risk management as I have only 6 months
financial derivative experience.
http://whitescarver.com/jim/

It occurs to me that the framework for risk is the same in any
application and is directly related to dynamical quantum logic verses
static classical logic.

The elements of risk management are:

1. identify potential risk (what is logically possible),
2. measure, quantify, metrics of the risk (probability),
3. monitor risk (change in indicators, e.g. ask/bid differential in
liquidity risk)
4. control risk proactively (e.g. put option),
5. mitigate the occurrence of that which is risked, when it happens,
such that it is detected, and countered, as is necessary, and the
model corrected to reflect the resultant risks.

While this seems simple enough, it is not solvable in finite time by
classical reasoning. Classical logic leads to best practices which
ultimately fail because the nature of risk is that it does not reflect
what is presently true, instead it represents arbitrary change in the
system and its expected behavior. Static logic is inherently bad at
dealing with it. Best practices constantly change.

In quantum systems, only change is manifest. In classical thinking
all possible futures exist to some probability, but the is proven
wrong when there is only one single quantum outcome, 100% or 0% with
no side effects.

Such is the nature of systems in general as exhibited by the fact that
such systems are incomplete by Godel. The notion that constructable
logical systems is a subset of classical logical systems is naive.
Godel's reasoning is itself incomplete by Godel. The postulate of the
excluded middle stands contradicted. Not all propositions are
decidable in real systems.

In classical reasoning the quantum needs to know the future to
determine cause and effect. In real constructable systems there are
multiple causes for an event such that events are cause-cause rather
than cause-effect. Constructable systems exhibit this cause-cause
nature as quantum system do. In classical thinking this is backwards
causality requiring action backwards in time. In real systems,
quantum systems, and constructable systems in general, synergistic
cause-cause behaviors are exhibited without any actual backward in
time causality. Cause and effect alone is simply an incomplete
preferred perspective and the true nature of time is relative, not
absolute. For example using a proven best practice, e.g. some trusted
option, causes failure when that practice is no longer useful and may
itself introduce risk.

Using quantum logic to mitigate risk is not new to the financial
industry. The "quants" get high paying jobs. Sometimes I wish I did
not hate the formality so much so that I could profit from it
personally. The formalities work, but leave you pretty clueless about
why or how the result is obtained. I am lexdysic and naturally think
in a superposition of states. But such systems become too complex to
comprehend with my small brain at the base level and I employ
abstraction that conceals the primitive formality such as my embryonic
Querk Calculus and G-S-Brown's Laws of Form. I would need to complete
the Querk Calculus or equivalent before I could sell myself as a
"quant", or even a real information physicist for that matter. I am
still a wanna-be.

Evolutionary logic gets the same answers as quantum logic, as it
effectively tries all possibilities, to determine the final discrete
or "quantum" outcome, without regard for cause and effect, allowing
symbiotic causation to flourish.

At the conference, Ben Shneiderman described the work of our mentors
as [[Science 2.0]]. Rather than the linear causal relations science
generally looks for, [[Science 2.0]] is multi-dimensional, and holistic
(multi-disciplinary). Such is the nature of quantum and evolutionary
logic in supporting truth that is relative, not absolute, but also
deterministic relatively, by relative synergistic causation, rather
than cause and effect.

In my view, solving the problems facing humanity will require
collaborative causality in the network nation. This implies Science
2.0 replacement of the classical notion of absolute truth and time, to
minimize our risk of failure, by maximizing our probability of
success, employing complete constructable (finite) quantum (or
evolutionary) logic.

JimScarver

Quantum Risk Management - Revision history

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