Comment: The weighting game

Aug 09, 2012
<p>It&rsquo;s not winning or losing but taking particles that counts, says Ian Williams</p>

After spending billions of dollars, physicists at CERN in Geneva think they may have spotted the Higgs boson, the elusive ‘God particle’ that gives mass to an otherwise massless universe.

Speculator, as always on the cutting edge of financial science, proposes that the bankers of Zurich should set up a similar project: a Large Havenot Collider, to find the elusive particle that gives money its heft. In anticipation, I’ve been tracking some of its destructive side effects.

When I moved to New York in the recession of 1989, my first apartment was on 30th Street, between Park and Madison.

The local chamber of commerce comprised two hookers at one end of the block, a dope peddler at the other, and there was scarcely a restaurant or bar from Grand Central Station to Union Square.

A decade on, there were bars and restaurants on every block with high-rent desirable residences above them.

Now, 20 years on, the biggest recession in 80 years hits, yet it’s difficult to weave your way through Manhattan for the bustling construction sites, and landlords are charging premium prices for sales and rentals. In London, too, construction and conspicuous consumption thrive.

So what’s happening? Previous recessions led to a massive destruction of wealth: farms, factories and houses closed down on a huge scale.

This time, while pensioners public and private look ruefully at nest eggs sucked dry by vulpine bankers, others wallow in wealth, buying art at astronomical prices, planning trips into space and generally basking in their abundant riches.

This inspires several hypotheses. One is that the recession doesn’t really reflect an economic crisis; rather, it was a smash and grab raid by people who already had lots of money against those who had some.

Despite comradely tears from Wall Street and the City of London, few former bankers, even those caught with their fingers on the insider texter, are on food stamps.

Quantum physics, however, accustoms us to the idea that particles can pop in and out of existence in a frenzied froth of creation and destruction, even that they could be in several different places at the same time.

Doesn’t this remind you of high finance as currently practiced? Vacuous nothingness creating more vacuum derivatives, and financial instruments reverberating in a virtual world where they disappear in a puff of evanescent economics as soon as anyone tries to measure them.

But this virtual world exercises a strange attraction on the real one, not least on the real money earned by real people who make and do things. Something is sucking the money of people who work for a living over the event horizon.

Science begins with a big idea, a hypothesis that can be tested. My calculations lead me to deduce that there is indeed a fundamental particle at work, giving some sort of quant mass to the froth of virtual money churning in and out of existence in the rarified universe of high finance.

I propose a major research study to establish the existence of the Biggs hoaxon, the ‘Mammon particle’. It may take years to find, but just think of the stimulus paying hundreds of pundits, economists and bankers to look for it would give to western economies.

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