Prospects of the American economy

Caroline Baum, an analyst "Bloomberg News"

As the holidays ahead of us waiting, and trade gradually melts away, now is the time to look forward. For the U.S., there are still two prevailing and diametrically opposed views.
The American economy is in a beautiful form, or is about to reach peak and go down. Household balance sheets are also either in good shape, or so strained that require a serious reduction in consumer demand.

The U.S. Dollar has made a very welcome and should be reduced or are on the verge of collapse, which will send increasing yield Treasury bonds and the global economy into a tailspin.

So, what happens?

For the inexperienced observer, the economy, growing at 4% with unemployment at 5.4% and inflation (core CPI), to 2%, is quite good. And even if our observer knows that the economy experienced a series of shocks, starting with the rupture of one of the biggest in the history of the stock market bubble and the collapse of business - investment and subsequent terrorist attacks, corporate scandals records, two wars, the price of oil for $ 55 and various concerns related to the presidential election, it will be even more impressed.

Return the double deficit

However, not all so simple! How about growing deficits (fiscal and current account) and reduce savings rates? The savings rate fell to 0.2% in October, that far from the historic minimum. The government had a record budget deficit of $ 413 billion in fiscal year 2004, which ended Sept. 30. And current account deficit, which is the broadest measure of trade, including goods, services and investment income, rasshirevshiysya to a record $ 164.7 billion in the third quarter. If you evaluate it as a percentage of gross domestic product, the gap fell to 5.6% in the last quarter, slightly away from the record second quarter to 5.7%.

Anyone who wants to find a precedent for such a fulminating mixture, do not need to delve too far into history. Last time, the double deficit was the reason that the "regulation includes the dramatic fall of the dollar (1985-1987gg.), The collapse of the stock exchange (1987) and, ultimately, the decline of American economy (1990g.)," the economists write "Barclays Capital Group "in its review of the global economy in 2005.

This is not the main scenario - at least not in 2005. Chief U.S. economist Henry Villmor said the forecast for sustained economic growth at around 4% and "balanced" monetary policy contraction.

Many risk

"There are many risks, which could lead to" adverse financial developments in 2005. And problems later, "said Villmor. The "bad", he means "Reduced sale of Treasury bonds, the emergence of problems on the stock market and housing, leading to a decline in general welfare."

Bond, suffering from large deficits, a weaker dollar and the five increases in official rates, refused to fall. The yield on ten-year Treasury bonds is about 50 basis points lower than it was when the Federal Reserve start to raise the target rate on a daily credit of 1% at the end of June. Exchanges of shares are also higher.

"If inflation begins to threaten the tolerance values of the Federal Reserve comfort zone - from 2% to 3% for the base consumer price index, the policy-makers will have to leave the" balanced "approach to the normalization of rates and, in fact, put a cross on economic growth," said Villmor .
This can result in cheaper sale stoic on the bond market. The dollar may fall as well as foreign investors will seek compensation for the erosion of real returns. Domestic investors can ignore the low yield in the face of fiscal policy initiatives that could expand the budget deficit in the short term.

Wealth savings

The growing housing market may finally release the steam, due to higher interest rates, which the (or promoted, depending on how you look at it), reducing the savings rate.
Net household reached a peak in the first quarter of 2000., Fell and did not exceed the previous peak until the fourth quarter of 2003. Since the third quarter of 2004., Households have shown increasing its net worth at 3 trillion. $ To peak bubble and a 7 trillion. Minimum of $ 2002.

"Yes, the savings rate of income reduced," said an economist from the "Citigroup Inc." Bob DiKlemente. "It will run its course. The savings rate will rise, but it will be gradual and over a long period of time, as interest rates and other incentives to change."

Profit as the basis

DiKlemente do not agree with the idea that economic growth has been artificially supported by highly supportive monetary and fiscal policy, and that after the removal of incentives, the growth will slump. Instead, he sees a "stream of mergers and acquisitions and rising short-term business - loans will be the early sign that the business ceases ostorozhnichat.

Recent data from small businesses - the November index of the National Federation of Independent Business - has shown that optimism is consistent with the 30-year peak set in 1983. Small business hiring plans reflect the strengths of staff and record levels of capital investment.

"Leading figures associated with the strategies of growth rose sharply," said DiKlemente. "This is yet another sign that the risks are reduced." The optimistic outlook DiKlemente long supported increasing the rate of return of non-financial corporations.

"No significant decline did not begin with improving profit margins," he said. "Rate of return affects the way in which business perceives the future." It sounds as if the optimists and the pessimists are talking about the same economy. The only thing with which they agree - is that a lot of bad things can happen in the next year.

If these things do not happen, the pessimists only moved its forecast for 2006.



Forex Magazine
based on www.bloomberg.com

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California guru

In late 2001, the magazine «Sun» has published an interview with Joe DiNapoli - one of the most popular American traders [1]. In March 2002, DiNapoli, as well as two other well-known financial guru - Borselino Lewis and Larry Williams, came to Moscow where he participated in the exhibition-conference «Internet Trading. Ekspo2002 »[2]. Many of our readers have been very happy to personally speak with «living legends» financial world, but expressed regret that not all able to talk with them. Journal «Sun» begins a series of regular publications on the world-renowned trader. The first issue to our readers are invited to an interview with John Bollindzherom.

«Currency speculator»:
Hello, Mr. Bollindzher. Our first question: readers interested in Russia, as you become the trader?

John Bollindzher: The question journalists ask me most often. In the late 1970's I worked at the studios and was involved in the film as a cameraman. I was one of the earliest models of PC. At that time, I wondered how it can be used to adjust the picture quality. Gradually, I became increasingly enamored with computers and less and less work in the film. By 1980, I went with the head of the computer analysis.

«AC»: How do you use a balanced strip Bollindzhera? What is meant by «breakwater Market»? In what segments of the financial market, this method is applicable, and in what circumstances the use of balanced lines must be careful?

DB: Balance strip - this is sort of middle line, which, in turn, is detected by the trend. This line is not selected to ensure the best signal intersection, and turn to describe the intermediate trend. However, it should be remembered that this line should be used as a «anchor» - a reference line for all the other bands. Therefore, if the selected line, which gives the best signal intersection, it would be too short to provide a suitable anchor for the band.

Realizing that this line is a narrative in the trend, it is important to know how to better use. Initially, I used the lane and the middle line to describe the movement of stock prices in the U.S. market. I know that many traders use it, not only for market shares in other countries, but no less active - in FOREX and commodity markets. With regard to care, which should be applied to the strip of different segments of the market, then perhaps it would be inapplicable to illiquid markets and markets with low activity.

«AC»: It is well known that the algorithm Bollindzhera strip is such that 95% of the price fluctuations within the band. Is this as an opportunity to trade against the market? And what happens if the price would be outside the band?

DB: The answer is - no, and here is why: we use the strip to determine the price is relatively high or relatively low? If the price is at the upper edge of the band, one can say that it is relatively high, and if at the bottom of the band - that is, by definition, we say that the price is low. Thus, the behavior of prices compared with other indicators, and it can also affect the trend-dependent solutions. There may be situations where the price is at the upper edge of the band in a strong enough market and its movement is very strong, and therefore there is no reason to sell. In a similar situation where the price is within the upper edge of the band, but the market is weak internally, you have to keep its price within the limits of the band, it should be sold. In other words, your actions will depend on the dynamic behavior of prices within the band and must be confirmed by other indicators. I prefer the indicators of volume. It seems to me that they are very well suited for this purpose. However, I have seen, as in this situation, well a variety of indicators.

«AC»: Can I use line strips Bollindzhera as effective levels of resistance and support?

DB: Of course, this can be done. For example, the upper edge of the band will be resisted when the weak market and the lower edge of the band will be the level of support for the strong market conditions. But you must understand that the price can remain above the upper border of the band a long time, if the market strong, or a long time to be below the lower limit of the band, if the market weak. In such a situation in a sustainable ascending or descending trend wise, respectively, to sell or buy. You must show itself, when it is obvious that the situation in the weak upper band, and in doing so you are ready to act. I would like to make a small gift from America Russia. Through research for my new book, I found a curious thing that you will be very interesting. By monitoring market dynamics, I found that if the two on the twentieth and the fiftieth day match, then in such circumstances, the trend is very strong. With a strong trend you will see that the form of strips prior to the twentieth and the fiftieth day varies almost identically. This is - a reliable way to monitor the trend.

«AC»: Thank you for the gift. It is certainly of interest of our traders. Tell me please, but you can use strips Bollindzhera to check the false puncture resistance and support levels?

DB: Sure. We can recommend a way, very similar to that discussed earlier. Falsity of the puncture can be defined on the real macro-economic processes. For example, a popular method in the U.S. is to compare the average in some industries with the dynamics of indices of industrial development. If we compare the price point was higher than the upper bound of the band, with a corresponding time-economic indicator, and it is on the decline (ie, we can see that these two points are on divergent lines), it's likely there will be false samples. But if the price point above the upper band and a point on the lines of industrial development are in the ascending trend, most likely, be expected to significantly enhance the market.

«AC»: Are there any features you would with your indicator on the market FOREX?

DB: Of course, the results of my work is widely applicable in the market FOREX, but there are some differences from trading shares. For example, when the movement starts, it goes further and lasts longer than one would expect for the stock market. When working on the trends that I have given special preference should be to pay attention to the breakthrough, when the band goes down very low, and the price goes beyond its limits. We call it squeezing the prices (squeeze). It is, in particular by FOREX, often leads to big changes. In fact, not so important, what options do you use: time period, deviation factor, etc. Much more important for the trader when the narrow band starts to grow and become very broad, or the reverse process occurs. When the expansion is just beginning, this heralds a start of big changes in the market. And when the band is widened, and the process of winding down in the opposite direction, it means the end of the change.

«AC»: The next question concerns the Elliott wave theory. To what extent it describes the processes in the financial markets? Do you have this theory, and in what context?

DB: I think that Elliott wave theory in fact reflects the basic trends of processes and mechanisms in financial markets. The problem is that most of the practitioners saw it «globalism». They believe that this theory has always and everywhere true. However, I do not think that it is the key to all problems. Nevertheless, the wave theory can be very useful for operations on financial markets. I'm not sure how many others, that the theory of Elliott always works without failure. I do not even think that it is applicable in most cases. But when it works, it works quite well. In this sense, the theory resembles vzvinchivanie price: it occurs when the benefit is a series of circumstances for this growth. But it is not too often. I think that people are not too get to the heart of this theory. They are trying to apply it in all cases. However, it is acceptable only in certain situations - for example, in the early stages of development processes in the markets. So this theory, the most winning position.

«AC»: Please tell us about your future plans. Are you going to publish new books?

DB: Yes, I plan to publish two new books. One of them will be the second part to the already published a monograph «Bollindzher and strip Bollindzhera» - I have accumulated a lot of new material that I would like to add. So I'm going to combine the new material and a guide to its study. I want to describe the general rules for the functioning of financial markets. And plan to come to Moscow - I'm waiting eagerly. This will be my first visit to Russia.

«AC»: What do you expect from this trip?

DB: I just want to know a little more about modern Russia, that is happening here. When I send to travel, I always try to learn something new. I really want to see how people benefit my book. I also hope that I have interesting new ideas in the area in which I work. I would like to learn about other ways in which I might not be familiar, but which have been successfully applied to your market. Do not often see an other working conditions of the markets, or totally different perspective on the analysis.

«AC»: Tell us about your hobbies.

DB: I love surfing and music. I have a substantial collection of music, although I do not play musical instruments. I like to cook.

«AC»: What do you want to wish the readers of our journal, and all Russian traders?

DB: I would like to say this. The concept of market is different from that under which it is traditionally understood. It covers all major territories. The entire world - it is a huge financial market, and I think that traders have a great prospect for the next few years in this world. I am not saying that they would be easy, however, on all grounds, working conditions in the next few years should be good.

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Mephistopheles from Cleveland

For the descendants of John Rockefeller was the real embodiment of the American dream. She started her career as a simple accountant, by the forty years he became the richest man in the world. Philanthropist, and a ruthless businessman, Rockefeller gathered in all the vices and virtues, which have existed in the wild America in the late XIX century. Now published in Research "is preparing to release a book of American author Howard Minza" Money and power. The history of business "dedicated to the history of the life of an entrepreneur. The material for the article kindly provided by IR "Analysis."

Reduce and conquer
From the age of sixteen, John Rockefeller was forced to earn his own living. However, salaried employees, he worked for three years - in the office of a Cleveland accountant trading firm. In 1858 John, together with a friend, opened a small grocery desk "and Clark Rockefeller." Cases partners were quite good, and the twenty-four years Rockefeller saved over 4000 dollars. For all the money he bought shares of refinery, built just outside of Cleveland. The first oil field in the world, opened in America seven years earlier, caused the country's present oil rush. This was akin to a frantic race for gold, which then tells not one generation of American writers. Do not resist, and the young John Rockefeller, kinuvshiysya to head the new business.

In 1870, he founded the Cleveland company, Standard Oil. However, according to the businessman, a registration clerk in the House, his firm became the twenty-sixth on account of oil company incorporated in the state. Cut-throat competition does not leave any chance to the entrepreneur.

While oil prices have changed with incredible speed. For example, a barrel of oil, stoivshy the morning of 13 dollars, in the evening to fall to 10 cents.

Penetrating into the subtleties of business, young entrepreneur realized that victory in the competition can only be achieved while reducing the cost of transporting oil from wells to a processing plant. At that time, all oil is produced in only one field and processed almost at the same plants with the same technology. Therefore, price advantage can only give lower transport costs. "Decide a transport puzzle in its favor - and you can conquer all of America!" For the Rockefeller Foundation has had such an opening force of the Holy Scriptures. He concluded a secret agreement with three state railways. "Standard Oil" had pledged to use only those three firms. In turn, the Rockefeller Foundation, the railroad promised to substantially reduce tariffs for the transportation of oil. Business has gone up the hill. While revenues grew entrepreneur enormous pace, its competitors began to gradually broke.

Scandalous fame
Although the contract was a secret, about him all the same soon pronyuhali leisurely journalists. Against diabolical John Rockefeller rebelled all American oil. Crowds of angry people with burning torches scrambled to destroy cars with the words "Standard Oil. Rockefeller, whose name has previously heard only the business people of his native city, trice became known throughout the country. Press called him except as Mephistopheles from Cleveland, and the riots of 1872 known as "Cleveland massacre." After just two months since the conclusion of a secret pact the court found the agreement illegal. But this time, John Rockefeller quite enough to buy a song for 22 of the 26 state oil companies. All of the first in a short period, he acquired 53 refineries, of which 32 were immediately closed, retaining only the most profitable.

During the massacre, "the businessman controlled 10% of U.S. refining industry. Ten years later, the share of Standard Oil "had already processed 90% of all the world's oil. It was then that John Rockefeller became a truly rich - the richest man of America.

Two dollars per second
A Rockefeller was the idea to close all the oil business itself: beginning with the oil and sell petroleum products to the consumer. He invented the first vertically integrated company.

Traditionally, oil is sold on the market by independent brokers that have earned five cents per gallon of kerosene. Rockefeller thought it unforgivable. He wanted to earn that money! "We had to create methods for sales, far surpassing that then existed," - he would say later. To get started, Rockefeller destroyed the independent oil dealers. In their place came supply units "Standard Oil.

By the end of the century company, Standard Oil controlled nearly all the refineries in countries that produce a third of the crude oil in America, owned the second largest steel manufacturer, and managed a fleet of thousands of rail cars, barges and ships. Its property is a lot of coal and iron mines. By the mid 90-ies of the Rockefeller Foundation, the company evolved into a fully vertically integrated oil company. Oil escape from the well "Standard Oil, traveled through the pipeline" Standard Oil, clear on refinery Standard Oil, shipped in the tank "Standard Oil" and even sold to the end consumer sales agent "Standard Oil. Control the entire production chain, Rockefeller is no longer dependent on any vendor, nor of the incompetent distributors of any other vagaries of the market. He reached the order.

Since then, the money in the pockets of millionaire polilis river. At a time when most Americans were at two dollars a day, Rockefeller earned nearly $ 2 per second - more than 50 million per year.

It managed to create a Rockefeller with the best management structure. Instead of trying to personally manage their business through fear, as did most big businesses, it has delegated some authority to managers. In the "Standard Oil" was even created specialized committees: the production and procurement. Now we are not aware of other governance structures, but a hundred years ago it was truly a brilliant invention. "By creating incomprehensible complexity of the empire, he was sufficiently clever to be able to dissolve their identity in the organization," - says Rockefeller biographer Ron Chernou. Specialist in business history, Alfred D., Jr. Chendler. Rockefeller called the invention of the creation of a new subspecies of economic rights - to the salaried manager. " According to the Brookings Institution, in the period from 1880 to 1920 the number of professional managers in the United States has more than six-fold - from 161 thousand to a million or more.

Charitable bribe
The famous rich man loved to observe, that to him and to his business law applied only to ex post facto. Secret railroad transaction that led to the massacre of Cleveland, in fact, become illegal only in 1887 when the Commission was established on interstate commerce. Combinations of restriction of trade, is a vital foundation of the vertically integrated companies have been recognized as illegal only after the adoption of the Sherman Antitrust Act in 1890.

In gathering material for a biography, Ron Chernou found in the correspondence Rockefeller numerous confirmed instances where the business simply to pay bribes to politicians to influence the outcome of legislative activity. 250 thousand dollars spent by the Rockefeller campaign McKinley in 1896, were only the most dramatic episode of the activities that Rockefeller saw as a necessary business expense. " Neither the Commission nor the antitrust act did not affect the ambitions of the entrepreneur. On the contrary, since this is the first he had to redouble their efforts to treatment of legal obstacles erected in front of Standard Oil. Rockefeller is constantly "buying" politicians, is simply not knowing how else can you have with them. He saw himself in the service of higher interests. For him, cleaning business was a matter of inefficiency, pleasing not only the economy but also the country, and God. But businessman underestimated the extent of public outrage.

May 15, 1911 the U.S. Supreme Court finished hearing Rockefeller, consisting of 23 volumes of testimony, totaling 12 thousand pages. At last, the eleventh-account process was caused by 444 witnesses, in the presence of which the Court ruled that Standard Oil was a monopoly and is subject to fragmentation.

The news caught Rockefeller playing golf. After carefully listening to the message, a great entrepreneur turned to its partners in the game and said: "I recommend that you immediately buy shares of Standard Oil." Perhaps it was the wise counsel, who ever gave Rockefeller, preferring to enjoy alone the fruits of their mind. As a result, Standard Oil was broken into 34 separate companies. But John Rockefeller has managed to retain control over each of them.

Subsequently, many of these firms grew in the industrial giants such as ExxonMobil, BP Amoco, Conoco, Inc., ARCO, BP America and Cheesebrough Ponds.

At the time of sentencing condition Rockefeller was estimated at approximately $ 300 million. Two years later, as a result of the execution of the penalty, that figure has tripled, to 900 million (equivalent to the current 13 billion U.S. dollars). For comparison: the entire federal budget in 1913 was only 715 million, while public debt was 1.2 billion dollars. The wealth of the Rockefeller Foundation has reached approximately 2.5% of gross national product, while the current state of Croesus Bill Gates is only one fifth of this figure. Lose antitrust process resulted in the greatest career success Rockefeller. In addition, it is time for a new market, the largest consumer of oil - the car.

Germ of laziness
Rockefeller once said that if it were not for charity, it would be three times richer. Indeed, the businessman handed out money to those in need with the same ease as they worked.

Contemporaries said that apparently John Rockefeller looked real curmudgeon. But it was impressive, he handed out to children dime-desyatitsentovye coins - has become a true legend. During his life, Rockefeller, and based his funds donated to charity more than 530 million dollars. One only has received from the University of Chicago, a famous entrepreneur of 35 million dollars.

Through its "Sanitary Commission," Rockefeller helped to destroy the South ankilistomidoz - the so-called "germ of laziness." One way to combat the disease has become a mere distribution of tens of thousands of pairs of shoes. The world's first organization devoted entirely to human health has been the Rockefeller Institute for Medical Research (now Rockefeller University).

Snake oil
In life, Rockefeller was a man of relentless controversy, almost all of whom were brought to absolute extremes. The philosopher William James once said that John Rockefeller - this is a very bad and very good man, whom he had ever seen. "This is a man deep in 10 tiers and completely incomprehensible to me - he wrote. - On the top surface of a seemingly perfect and integrity and all the accused that he was the biggest villain in the business ever created by our country."

From his mother Eliza Rockefeller inherited the best of human qualities: istovoe piety, moral austerity, frugality, hard work, self-discipline and social consciousness. But when civil war broke out, John for 300 dollars to buy from service in the army, because it was a true abolitionist. Moreover, he married a girl from a family whose members were conductors on the "underground railroad" and at one time hid in the house of the famous American abolitsionistku Sodzhorner coward.

Rockefeller's wife, Laura Spelman Ketty, with whom he lived for more than half a century, as Eliza, was the standard of piety. Over time, the family oil tycoon has four estates with beautiful trails for horseback riding and golf course for nine holes. But inside the house did not have any luxuries.

Even at home they had not lost in vain. John Rockefeller, Jr., their only son, once uttered, that until the age of eight was only women's clothing - obnoski sisters. Ketty and I were their own social aspirations. She founded the first school for freed black women's education - Spelman College in Atlanta.

But from his father, Rockefeller Senior inherited directly opposite tendencies, for example, the ability of low cunning and designing. William "Devil Bill" Rockefeller was the so-called "snake oil merchant" and dvoezhentsem. He traveled throughout the country, selling worthless medical medicine, and gave himself for it "botanical physician, for the" well-known expert in cancer ", in the impoverished deaf and dumb. Finally in 1855, Bill devil ever left the family, marrying at young girl who knew him as Dr. William Livingston. According to Ron Chernou, stepmother great entrepreneur Margaret Livingstone Elien only in recent years to learn that her husband was the father of the richest man in the world.

Sam, John Rockefeller of affairs more than once resorted to various tricks, and even threats. One day he told his wife that people succeed in life, must sometimes go against the current. "You can not fear that you bran hand - he said one of its competitors - but your body will suffer." When the threat fails, he falsified the transaction. When this did not help, he simply bought the people, their voices and support of the newspapers. One senator from Ohio, Rockefeller handed over 44 thousand dollars that he discredited the Attorney General of causing discomfort to the activities of Standard Oil.

Rockefeller was a man of tireless repetition. Every morning he was at the same time, play golf, chewed each piece ten times before you swallow, and rinse your mouth ten times each gulp of liquid. He possessed a great deal of willpower, and he seldom failed to get what is wanted. One of the goals of the Rockefeller Foundation was celebrating its 100 th birthday, and he nearly achieved it, died in 1937 at the age of 98 years.

Grand Dynasty
Son dvoezhentsa and devout Christian, Rockefeller gave birth to one of the most prominent and generous American families. John Rockefeller, Jr.. devoted his life to philanthropic and civil cases, giving to charity an additional 400 million dollars. To send a gift to the federal government, he bought land that later became the American National Parks Grand Teton and Acad. The grandchildren of the famous entrepreneur, too, played a big role in the history of their country. Nelson Rockefeller became governor of New York, has run for president from the Republican Party, then - the Vice-President of the United States. His brother Uintrop was governor of Arkansas and chairman of the board of Colonial Williamsburg, the basis of which the important role played by John Rockefeller, Jr.. Lawrence Rockefeller, a recognized defender of natural resources, the State donated the land for the creation of Virgin Islands National Park. John III was led by the Rockefeller Foundation, brought together one of the world's largest collections of Oriental art, and funded Linkolnovsky Center of Fine Arts, New York. And David Rockefeller was chairman of the bank Chase Manhattan, the head of the Council on Foreign Relations, as well as mainly due to the Museum of Modern Art - another project the Rockefeller family.

Now great-great-grandson of oil tycoon John D. IV - member of the Democratic Party and a third term as senator from West Virginia. A beautiful name for the future.



By Julia Tikhonova

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Nobel psihoekonomika

In 2002, the Nobel committee awarded the first prize for economics adherents of two opposing points of view. Vernon Smith experimentally proved that in a situation of massive purchases and sales team of people behave rationally limit. Daniel Kahneman et al confirmed the opposite point: the person is of conduct other than that attributed to it by the economic textbooks.

Experimental economics
The classical economic theory, taking its roots from Adam Smith, assumes that all people are selfish and their behavior is determined exclusively by personal gain. At the time, A. Smith, market players, whose behavior is defined by the cold rational logic, «homo economicus». The best minds of mankind good hundred years, under the influence of classical economic school and its concept of homo economicus.

Refute, like just check the rationality of economic agents could not be identified. And today's economy in many areas is a bezeksperimentalnuyu science, where researchers can not test the theoretical assumptions in the experiments. According to an authoritative professor at Harvard University Gregori Mankiw, whose textbook on macroeconomics translated into Russian, the absence of controlled experiment is the fundamental problem of all economic science. In a sense, the impossibility of conducting a controlled experiment brings together the economies of such sciences as astronomy and meteorology. Specialists have to rely on the so-called field data, the results of direct observation of the real world without the active intervention by the researcher. This depressing situation lasted quite a long time, while economists were not involved laboratory experiments. Under the influence of laboratory experimental economics has undergone a significant process in the last two decades of XX century. Controlled laboratory experiments have become an integral component of any full-scale economic research. Thanks to them, many of the theoretical postulates of the classical school have been refined or refuted. The process of change mainly affected two major areas: cognitive (cognitive) psychology, studying human thinking and decision making, and experimental economics, whose task is to verify theoretical models in research laboratories. The recognized leaders in both directions are Vernon Smith and Daniel Kahneman, by October 9, 2002 was awarded the Nobel Prize in economics.

Dossier

Vernon Smith (Vernon L. Smith)
Prizes awarded for the «use of laboratory experiments as a tool in empirical economic analysis, especially for the study of alternative market mechanisms».
Date of birth: 1927
Citizenship: USA
Current work: Interdisciplinary Center for Economic Science George Mason University (Interdisciplinary Center for Economic Science of George Mason University, USA)
Education:
• California Institute of Technology (1949),
• State University of Kansas (1951),
• Harvard University (1955).

Recent publications:
• Papers in Experimental Economics, December 1991;
• Bargaining and Market Behavior: Essays in Experimental Economics, June 2000;
• The Handbook of Experimental Economics by John H. Kagel (Editor), Alvin E. Roth (Editor);
• Paving Wall Street: Experimental Economics and the Quest for the Perfect Market by Ross M. Miller, Vernon L. Smith (Foreword), January 2002;
• Essays on Genetic Evolution and Economics by Terence C. Burnham, Edward O. Wilson (Editor), Adam M. Brandenburger (Editor), Vernon L. Smith.
Personal pages on the Internet:
1. http://www.gmu.edu/departments/economics/facultybios/smith.html
2. http://www.er.uqam.ca/nobel/d133140/first.htm
E-mail: vsmith2@gmu.edu


Seller and buyer in the «limit»
Early experiments carried out by economic science enthusiasts, are fully devoted to the audit of the basic theory. The first test was subjected to pricing in the classical models. Classical School of Economics argued that under conditions of perfect competition, market prices balance supply and demand at a level that the price offered «limit» buyer (marginal buyer), compared with the price «limit» seller (marginal seller). The first checks for the neoclassical theory of perfect competition has taken a well-known American economist Edward Chemberlin [1]. It was the beginning of the 1950's laboratory experiments have taken a great interest many future Nobel Prize winners for economics, for example, Reinhard Zelten, and John Nash. At the forefront of the experimenters was Vernon Smith. Encouraged by the ideas Chemberlina, Smith's teacher at Harvard, he organized a number of laboratory experiments with students. Smith set out to determine whether the hypothesis of perfect competition in practice. They used stochastic model, where buyers and sellers act with different ranges acceptable price for the goods. Ranges cover the spectrum from least to most acceptable commodity prices. Given the price distribution, Smith was able to determine the theoretical equilibrium price of the goods, ie price acceptable to the majority of buyers and sellers. The obtained results of laboratory experiments, they were first published in 1962 in the «Journal of Political Economy» [2]. To his considerable surprise, the prices obtained during the simulation, consistent with the prices, the theory predicted, although the actual experiment, participants did not have full information as required by neoclassical theory. In order to find out whether this is mere coincidence, Smith and several other researchers have repeatedly recheck the results of laboratory experiments. In 1978, during a better experiment, Vernon Smith, in collaboration with Charles Plottom obtained similar results, but his work, he summarized the caveat that market institutions «relevant» for pricing [3].

Types of auctions
Much time Vernon Smith gave the theory of auctions, which emerged at the intersection of microeconomics and game theory in the early 1960-ies. Virtually all of the theory of auctions has been established by William Vikram, a Nobel laureate in economics of 1996, but his work lay solely in the theoretical field. Really nobody knew what the results provide any types of auctions.

Meanwhile auction mechanisms play a key role in the markets of raw materials and financial instruments, where the specifics of trading systems directly affects the outcome of the tenders. In the 1990's. challenge the adequacy of the auctions came to the fore - in developing countries in connection with the transfer of state property into private hands, while in developed countries with regard to deregulation and privatization of television and radio. In the theory of auctions is allocated only four basic types of auction for the sale of one product or service.

1. Normal, or English auction (English auction): in an open disclosure of the price bid ends when none of the buyers do not want to increase the price of the goods. English auction can be seen in the sales of antique collections of trading houses such as Sotheby's.
2. Dutch auction (Dutch uction): if there is transparency in prices start from the maximum bid price bids, and ended with the issue of a minimum acceptable price. Dutch auction Orgbankom actively used until 1998, Bank deposits exhibited at an auction, where potential investors are gradually reduce interest rates until it was the only investor with the lowest rate offered.
3. Closed the first price auction (the first-price auction, with sealed bids): No public auction, each buyer only once anonymously offers a price, eventually wins the party with a maximum application. According to the scheme to sell the domestic industry in the collateral auctions in 1996-97 years.
4. Closed the second price auction (the sealed-bid second-price auction): an application filed under seal actors, and the one who proposed the highest bidder, must pay an amount equal to the second highest offer. Currently, such a specific type of auction is not widely used.

A Dutch-something cheaper
Enter a controlled experiment, Smith with his colleagues in the scientific arena began to find out the same whether the actual results of auctions with the theoretical predictions of the outcome of the tenders. He found that, like the theories, identical results show English auction and second price auction is closed. At the same time, Smith denied the suggestion that the outcome of bidding for the Dutch auction and the auction closes first price match. Ranzhiruya auctions in terms of maximizing the final price tender, Smith found that most prices are fixed in the English auction and second price auction closed. Second place is the first closed auction prices, and the last - Dutch auction.

Dossier

Daniel Kahneman (Daniel Kahneman)
Prizes awarded for the «work of combining psychological studies and economic science, especially for the study of human thinking and decision-making under uncertainty».
Date of birth: 1934
Nationality: dual, the U.S. and Israel
Current work: Faculty of Psychology, Princeton University (Princeton University, USA)
Education:
• Hebrew University of Jerusalem (1954),
• University of California at Berkeley (1961).

Recent publications:
• Choices, Values, and Frames by Daniel Kahneman (Editor), Amos Tversky (Editor);
• Heuristics and Biases: The Psychology of Intuitive Judgment by Thomas Gilovich (Editor), et al, July 2002;
• Well-Being: The Foundations of Hedonic Psychology by Daniel Kahneman (Editor) et al, July 1998;
• The Handbook of Experimental Economics by John H. Kagel (Editor), Alvin E. Roth (Editor);
• Judgment under Uncertainty: Heuristics and Biases by Daniel Kahneman (Editor) et al, April 1982.
Personal Page on the Internet:
http://www.princeton.edu/ ~ psych / PsychSite / fac_kahneman.html
E-mail: psych@princeton.edu

Smith Plottom conjunction with one of the first began to use «Progonnyj tunnel», or method of wind tunnel (wind tunnel), in laboratory experiments. Using the verified mechanisms lifting of state regulation, privatization and tendering for the procurement of goods for the state. At present, these mechanisms are so complex that modern theory is unable to give an accurate predictive assessment of the results. For this reason, the only possible solution to the problem of becoming a pilot method. Smith used the «Progonnyj tunnel» for constructing an optimal schedule of take-offs and landings at airports. Moreover, its recommendations on the results of the experiments were taken into account in the deregulation of electricity markets in Australia and New Zealand. It is regrettable that privatizatory of the Russian Federation State Committee on the eve of large-scale sales of state property has not been familiar with the writings of Vernon Smith.

Happiness is not about money, but their numbers
Modern economic theory at the center puts material wealth. The well-being, life satisfaction or happiness in the minds of economists are inextricably linked to material prosperity. The well-being or utility (utility), the individual is determined to consume goods and their quantity. To maximize the utility of an individual chooses a particular course of action in certain circumstances, which may be uncertain (uncertain).

Generally, the preferred course of action the individual is fully within the rational-logical patterns of human behavior. All these assumptions are the basis of expected utility theory of von Neumann-Morgenshteyna (Neumann-Morgenstern expectedutility theory) [4]. According to the individual making the greatest values of utility function, seeking to adequately assess the probability (expectation) of events with which it will face. As a psychology dominated by a view of human behavior. In the cognitive psychology of human beings as a system that deliberately encodes and interprets information available. At the same time, the decision-making process directly influenced by subconscious factors. Among the factors that determine the interactive process of human thinking, the number of perception, mental models of the interpretation of life situations, emotions, the nature of relationships between actors and the memories of the earlier decisions and their consequences.

Based on the extensive theoretical work and experiments on human behavior, Daniel Kahneman and several other psychologists have criticized the assumption of individual rationality that exists in economic science. According to critics, in fact, the individual ignores the evaluation of uncertainty according to the theory of probability. Moreover, it is far from maximizing the utility, which insists on the theory of von Neumann-Morgenshteyna.

A number of studies, Daniel Kahneman, in cooperation with other Israeli psychologists, Amos Tver, has shown that people are not able to fully analyze complex situations in which future events are hidden by fog of uncertainty. In the face of uncertainty, the individual relies on a short heuristic analysis (heuristics), or on a rule of thumb (rule-of-thumb).

The process of human thinking for example, studied a group of people who had to assess the probability of random events. Most participants in the experiment gives the same probability estimates both small and large events, without taking into account that with the increasing significance of the events likely to be reduced. In other words, people follow the law of small numbers (law of small numbers), completely ignoring the law of large numbers (law of large numbers), on which the theory of probability.

According to the law of large numbers of individual events are vulnerable to random and non-factor than the mass of phenomena in general. When a large number of observation random fluctuations are mutually canceled, and it becomes visible to the general pattern of phenomena.

However, in two experiments, psychologists have demonstrated, individuals sometimes paradoxical behavior. They believed that the probability of birth of a boy in a large urban and rural hospitals are equal and amount to 0.6.

Similarly, investors believe that the investment fund manager more competent than the market as a whole, if the fund shows its best financial results in comparison with the stock index over the past two years. Although the validity of statistical sampling (number of observations) is too small to make such conclusion.

Subjective perception of individuals of events in the real world allows you to explain the various irrational phenomena in financial markets. In particular, the assessment of market shares from the perspective of the law of small numbers of permits to explain the appearance of "bubbles". The use of psychological analysis of the financial markets eventually led to a theory of behavioral finance (behavioral finance) [5]. The most typical case of inadequate investor behavior can be illustrated by the following example. If the action is, the investor bought, rose in price from $ 20 to $ 50, then, fixing the profit he will sell it without thinking. However, if the price of first foam from $ 20 to $ 80, then dropped to $ 50, the investor with great displeasure give an order to sell.

Unexpected perspectives
Not satisfied with the standard theory of von Neumann-Morgenshteyna, Kahneman and Tver offered his own theory in his article "The theory of perspective: an analysis of decisions under conditions of risk" in one of the rooms authoritative magazine "Econometrics" [6]. According to the theory perspectives (prospect theory), individuals make decisions in two stages. First, they limit the problem to be solved by some framework to study it in isolation.

In other words, the issue is edited by comparison with its original, resulting in a complex problem is transformed into a simple perspective. Then, individuals maximize the value of the function of perspective (prospect value function). It is composed of different perspectives are assigned probabilistic weights, reflecting the psychological norms and expectations of the individual. In general, there are four key differences from the traditional theory of the prospects for utility theory.

"For the individual is important, not so much the absolute value of his wealth (or value of any other economic variable), but its relative change.
"The changes are evaluated in terms of losses and gains with respect to some reference point (reference point), and as a rule, the loss of re, and the acquisition of undervalued. As a result of this rejection of losses (loss aversion) is not so much an individual actually maximizes utility, but minimizes antipoleznost ( disutility).
"Deviations from the reference point perceived by the individual with lower sensitivity (diminishing sensitivity). A smaller variance is seen much more painful than a larger deviation.
"Probability weights assigned to different perspectives or upcoming deviations, are assigned to non-linear law. Most of the probabilities underestimated, but very low probabilities, on the contrary, overestimated.

In 1992, Tver and A. D. Kahneman expanded the original theory of perspective, bringing to light an aggregate theory perspectives (cumulative prospect theory) [7]. An updated version of the theory takes into account a number of shortcomings of early authors. First of all, it is designed to analyze a large number of prospects being faced by the individual, resulting in the offspring of two close to the standard theory of probability. Testing the theory perspectives in practice shows that individuals make mistakes in dealing with the problem of optimal allocation of resources, such as the formation of the equity portfolio. Rather than risk diversification, they "put all your eggs in one basket", ie concentrated risks.

The theory has been able to explain various behavioral anomalies: why do investors ignore the recommendations of the Portfolio Theory Markovitsa; why shoppers doing the long road to take advantage of small-scale discount stores, why the staff member in no hurry to reduce excessive consumption, etc. For answers to these and many other "why "Kahneman and was awarded the Nobel Prize.

Awarded the prize Vernon Smith and Daniel Kanemanu, adherents of the two opposing points of view, the Nobel Committee allowed the long-running dispute among scientists, as early as 1991, Smith blamed Kahneman and his colleagues in the one-sided and ignoring other concepts. Now, the collective behavior of individuals susceptible to the irrational rational explanation.

Sergey Moiseev

References:
1. Chamberlin E. H. An experimental imperfect market / / Journal of Political Economy, 1948, ? 56, pp. 95-108.
2. Smith V. L. An experimental study of competitive market behavior / / Journal of Political Economy, 1962, ? 70, pp. 111-137.
3. Plott C. and Smith V. L. An experimental examination of two exchange institutions / / Review of Economic Studies, 1978, ? 45, pp. 133-153.
4. von Neumann J. and Morgenstern O. Theory of Games and Economic Behavior. - Princeton: Princeton University Press, 1944.
5. Shleifer A. Inefficient Markets - An Introduction to Behavioral Finance. Clarendon Lectures in Economics. - Oxford: Oxford University Press, 2000.
6. Kahneman D. and Tversky A. Prospect theory: An analysis of decision under risk / / Econometrica, 1979, ? 47, pp. 263-291.
7. Tversky A. and Kahneman D. Advances in prospect theory: Cumulative representation under uncertainty / / Journal of Risk and Uncertainty, 1992, ? 5, pp. 297-323.

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Success in the market life

Russian roulette and vorotily business, classical history, and financial speculation, poetry and mathematics, science and Sherlock Holmes battles - everything is on the study of friendship and enmity with Mrs. success. If your neighbor is making success on the stock exchange - he was a genius or vezunchik? «Sun» publishes interviews the author of the book «nicely left happenstance. The hidden role of chance in the markets and in life »Nassima Taleb, which he gave to the English News Agency Air Force.

When we make a mistake luck for skill, we are becoming the «accidental nicely left» - cautions mathematician and insurance risk manager Nassim Taleb. We need a book that reveals the roots are already accustomed to underestimate the accident. And in general, it is mathematically slim, attractive and informative book on common sense. It provides a wide range of readers. Students and financial officers, taxi drivers and lawyers, dentists, and philosophers - all can read this book, and through it to gain a new perspective on life.

- Mr. Nassim, you have such a rich knowledge of world markets, the resulting work in different places. It seemed to me that, according to set out in your vision, ultimately, each only benefit from good luck. Is it true that experience is not so critical?

- I have not gone so far as to say that everything is defined by success. Above all, we underestimate its role. We tend to attribute our errors at the expense of underestimating the good luck and give a much more important skill.

- Is it possible to quantify the extent to which performance is based on luck, but as far as ability, experience?

- Count it's quite hard, but I tried, and a huge number of people tried, and most of my friends also tried to evaluate it. I believe that such a calculation, and introspection, which he leads - just an attempt to determine how much depends on the case. Self-help to assess the share of luck, and this is very simple. There is the way of evaluation, and I want to outline that will help you to feel that he intuitiven. Suppose I have a million monkeys typing printers. Printing is. At the end of the experiment, which may last a long time, especially if you are not too skilled typist, you probably can find one that would have printed the Iliad. But if you have 10 billion monkeys, it is very likely that some of them will print the Iliad. However, if you have one monkey, the opportunity to print the Iliad would be very small. So if a monkey print Iliad, as you see in the original population, it can fairly accurately calculate her chances to have accidentally created this great text. The same applies to the reception of traders. If I will be 10 thousand traders as a reference group, after 5 years, surely one of them will reach a record of success. Would I not pay attention to the description of such a trader and not attributed it to high art. But if I had 5 of traders in the market, and after 5 years, one of them came to the same record the results, I would say: yes, it is likely that the role of luck in the actions of this gentleman is very small.

- People are more concerned about the fact that the games in the stock market usually cost them money. Entire areas can flourish and die, depending on events in world markets, and if a strong element of luck involved, it is likely that we would be less peaceful than it is now.

- There is a worry as well as a case not only in trading. Adventitious presence in making economic decisions and actions of similar type. For example, you read government statistics, most of which are based on any real facts. But often you are faced with playing a role of randomness, and the importance of statistics in this case is reduced. Nevertheless, a very large number of decisions based on these statistics. We, the citizens of Britain, more and more encouraged to invest in bonds that have a small portfolio of shares. Against this background, we can just be successful, similar to those who might be doing this every day for earnings and for a long time? I always thought the idea of investing in bonds is extremely suspicious. Especially suspicious arguments that accompany the proposals of the investment. I call this situation "survival bias." This is very similar to the past with the monkeys.

Let's say you are in the 1900-meters at the turn of the century, and you have ample opportunities for investment. Suppose you would have invested in securities in Argentina, the UK, the USA, Russia, France and other countries. Over time, you would have seen - since, in fact, survived only Anglo-Saxon markets. And Argentina, Russia, etc. since the early 20 th century has a lot of conflicts. Therefore, monitoring the results of the securities markets, we can say, to adjust the results of historical events. This is a story written by the victors. Investing in bonds - not a good idea.

- But you also say that the whole system, all the way, which is global capitalism, flawed?

- Not quite so. I believe that the securities market, especially since 1982, has become an opiate for the middle class. And people derive an income that is called a miracle and magic, which could create a market. They fool themselves, and at some point, thought they may have changed their views. But most likely it will be too late.

- Money drop by?

- Yes, the money drop.

- So you are saying that luck definitely plays an important role. But there is also such a thing as training projections. At least you have some of these skills?

- Definitely. The problem with the way to the press and most of the banks of the trader rather vague, as you can see, that did the trader, or do you see for the short term and exclude the results of luck. You come to the conclusion that the results were positive because they make the right moves. We seek to set aside an alternative outcome that could happen, and seeing only what has occurred. And this is a very bad way, so how can we get in trouble. In other words, if you have a random outcome is possible, You can have more than one outcome. Therefore, do not estimate selection decisions on its results, and consider taking action on their quality. What has happened over the past 15 years, bovine market, distracted us from the quality and led only to observe the results. We will be punished.

- With regard to punishment, it is interesting, as expressed in your book and your theory of those with whom you have worked in the market? Is the book part of their exposure? Generally, they want to stay in the shade?

- On the contrary. Most of them are forced to admit that very few people are successful in the sale of shares. An extremely large majority of people are failed. Traders like my book, as they hear the clink of coins. They told me: "Well, even if I am not George Soros and Warren Buffett are not, if I am not billionaire, what would I like to see my relatives and friends, this is not because I am so not competent, but mostly because of the that I neudachliv. That is why my book has attracted traders.

- But the converse assertion is that people like George Soros and Warren Buffett have been fortunate and perhaps permanently successful, and if you go back to your secondary display on the law of numbers, it becomes particularly clear. But, referring to people like Soros, we constantly ask: what, in their opinion, should happen to the world markets? We almost worshiping these people, because they think they know something that does not know the rest. But it appears, due to the fact that you say, we simply mislead.

- Yes, but my idea and the book is not that these people do not know what they are talking about. My view is that they know a little bit less than we expect.

- That is, they benefit from what might they not?

- In most cases, that they do, there is a fortune. These guys are not dentists. Dentist, I can assess, look what he did. I even can stand behind the doors of his office and ask people to open mouths to see their teeth. Since traders are not held because you are dealing with random factors. It is therefore easier to buy and sell than fire egg. So, if people only buy or sell, you can not really evaluate them as accurately as the actions of a dentist or even a violinist.

- What is interesting is that for many years, we hear about people who took their own lives, as they felt the hindmost in the market. And if we look at it from your point of view, it will come to the conclusion that people should not be about anything from their failure to take at its own expense, personally.

- Certainly. My last chapter that does not allow self to be deceived by things that are beyond your control. " You can control a lot, but that you control, you can control in principle. You should not allow their self-esteem to be broken by outside events, outside of your control.

- It is much easier said than done. Humans often consider themselves typical loser in a case that took a bad turn, even if they are not always are subject to verification.

- You're right. This dilemma was one of the heroes of the book, called "Nero", who had a rich neighbor. He knew that his neighbor, an idiot, but, nevertheless, deeply in his heart he felt holding an inferior position. And that is why experienced some satisfaction, some joy, when the neighbor lost his job and failed during the crisis of 1998. That is true. We have animals that are involved in the game of social hierarchy and clamped external circumstances. The way in which I defend themselves - the only way that I know, and it is in disregard of the news. Completely ignore the people, the results are better than mine, not uvivayas around them. Therefore, the rules of social hierarchy is not evident. You're right, it is irrational.

- Okay. But it turns out, if you look from, the news very often, as well as world events have had a strong impact on financial markets. Therefore, as you can be a trader and not to feel the pulse?

- I'm a little bit different style of work. I sell only on a narrow segment of the market and on the basis of ideas, which I am sure, totally no accident. And this is usually an advantage to people who are looking for a model where it seems to me that it might not be. So my slightly different type of trade. And so I can ignore the external events.

- So in a world where there is no certainty you feel confident?

- On the contrary, I am doing the opposite. Someone thinks that he has a certain position, but I would say that he do not. I therefore conclude that this is like a lottery. I consider only those cases where it is not right, because he did not take into account a possible error.

- Consequently, in view of what was said, you lucky man?

- I think - the average. There is a test. If you also have to live your life a thousand times, how many outcomes are radically different from the one that actually occurred? That's the conundrum. Some people were of luck and the rest of the time their success was lower. I think my life is somewhere in between. Simply because as a trader I am extremely conservative. And I really worked on a lot of introspection. And I do a lot more introspection during the trade. In my company, our meetings, we say: "Let's look at today." If you're introspective, you can protect themselves from accidents and provide a positive band. It is also likely that you will be able to reduce the effect of negative strips.

- When it comes to markets and finance, we have a lot of earnest talk about confidentiality, and assess - a very difficult task. Is there is a danger that your book has a few breaks confidentiality? Because what it is, debunk some myths. - This may dispel the secrets gurus who talk about things that do not have statistical significance, that it is easy to show, simply on the basis of these statistics - a very standard technique. But I think that my book raises self-esteem of most people who are, to some extent because it would be justified. Because they said the same thing, but nobody has drawn their attention to the words when people are passionate about bubble dot.com, high rises the market, all these things, "good", the general view (well, of course, in quotes). I think my book will give confidence to people that have been configured with skepticism and this would benefit their self-esteem.

- So, your book is "nicely left an accident" will bring hope to the hindmost?

- Certainly.

- Let's hope so.

Mr. Nassim Nicholas Taleb, I am extremely grateful to you for the interview.

- Thank you. A thousand thanks for having invited me.



Material prepared by Ivan Zakaryan

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Internet security in the bank

Internet is all hearsay, and if you have not been dormant the past few years have undoubtedly noticed excitement around the global network. Links to current online representation firms and public organizations have everywhere: in television, print ads, brochures, business cards, the price lists, catalogs, etc.

Internet in Russia
Please note that international policy-making at every opportunity to mention the close link success of democratization in a society with the creation of "global information highway, and large corporations in the strategic development plans take into account the possibilities and potential of the Internet. Is not difficult to conclude that the global network is becoming part of world culture and fundamentally change the way we communicate and do business.

The fact that the Internet is huge, everyone knows who has something about it has heard. But how is the development of the Russian segment of the global cyberspace, known only to specialists. And they reveal: rates of development of Internet services in Russia in 2001 were ahead of the relevant American measures. Only in Moscow, an increase in the number of users over the past year amounted to 500%. During the same time, the number of Russian-speaking servers worldwide increased by almost 50 times.

Advertisement quickly mastering the Russian segment of computer networking. This channel is the dissemination of information about goods and services become as important and indispensable for companies operating in the Russian market, as well as others.

Create your own representation in the Internet - a task which, sooner or later comes to every organization, leading the commercial activities. This is important timely decision on the establishment of such representation. Those firms that actively learn Russian cyberspace, gaining invaluable experience in the creation of new communications, new technologies for decision making, corporate organization of professional communication. This experience enables us to effectively solve many problems of everyday business.

Until 2000, Russian society divided between those who have already realized this and started to use internet technology, and all others who are waiting for something, and maybe do not feel an intellectual and economic backwardness. It turned out that the delay in making a decision about the presence on the Internet, even for six months led to serious consequences, as well as more vigorous competition from the rapid formation of new relationships fundamentally changed the situation in a specific economic niche.

Now all the "sit" on the Internet. Many companies turn to the highlighted line. But it is possible that the contents of this line is more expensive than buying "cards." Network Payment is made on the basis of the obtained data, and not for the use of time. Companies providing these services, an interest that you downloaded as much information as possible, but because download speed when using the "vydelenki significantly higher than in the" dial up ", then together with the information you ???????????? all kinds of advertising and special (bulk) viruses, you do not notice. Thus the amount of information you received increases.

System "Client-Bank"
System "Client-Bank" - the most advanced technology of the customer with the bank in 2002. To connect to the internet version of "Bank-Client" must enter into an agreement with the bank.

After signing the contract you receive:
"User's identity card, containing your assigned user ID and password, a list of available commands and the user accounts, with whom he can work;
- A floppy disk containing the file certificate certifying agency bank (JSBR Certification Agency.cer), and file-preparation the key needed to generate your digital signature (EDS). By the time of installation must be:
- INTEL-standard computer with a Pentium, color monitor with a resolution of 800x600, mouse.
- Operating system Windows 95/98/NT (SP5) / 2000 with the browser Microsoft Internet Explorer 4.01 or higher (we recommend IE 5.0).
- Access to the Internet.

Many commercial banks are moving to a system of "Client-Bank" to accelerate and improve interaction with customers. But is the system safe for the bank itself?

Security Bank
Usually when it comes to the safety of banks or other companies, their leaders underestimate the importance of information content. The emphasis is on physical safety (throughput mode, security, video surveillance systems, etc.). However, in recent years the situation has changed. To penetrate the secrets of the company, there is no need perelezat through bypass perimeter fences and sensors, to invade protected by thick walls, rooms, open safes, etc. Just enter the information system and to transfer hundreds of thousands of dollars on other people's accounts or destroyed by any node corporate network. All this will lead to massive damage to the attacked organization. Depending on the type of activity your computer may be a subsidiary or a tool to facilitate the work of your employees, or tool, without which the work is in principle impossible.

But in any case before you as a human decision-making or participating in their preparation, sooner or later the question arises:

"Do I need to protect their resources and how." Answer is: to protect it. It remains only to understand why. Replies to this question may be many, and they are all directly dependent on the structure of your company and its activities.

Do not believe vendors and integrators, who say they are equally ensure the confidentiality, integrity and availability of your information. This only proves that they do not understand what they are talking about, and are unlikely to be able to offer solution for your needs. Each of their priorities for protection. One, for example, it is necessary to ensure data integrity. Banks are primarily interested in the continuity of financial transactions. Just imagine what would happen if platezhke to the amount of payment will be added to a noughts or change details of the beneficiary.

But for the operator, the primary objective is precisely to ensure the safe operation of all (or most important) of its network nodes. Put this kind of priorities can only be obtained from the analysis of the company.

Real and virtual damage
The financial damage could be direct or indirect. Examples of causing direct damage is known a great many. They manifest themselves most vividly in the financial sector. For example, in February 2002, Bank of America was forced to turn to the appropriate law enforcement authorities to investigate the incident with the emergence of a fake internet site of the bank, which was used to mislead customers in order to gain access to their confidential financial information.

Similarly, in early February fraudsters "oblaposhili clients electronic auction eBay, and have access to data on credit cards of his clients. However, the establishment of front web sites - not the only method used by attackers. Often, they penetrate into the banking system from the Internet. Thus, for example, has broken a major commercial bank Republic Bank in Florida. Hackers broke into the system and stole information on the 3600 credit cards and their owners.

However, the company may lose money, not only as a result of fraud or theft. For example, the removal of the hub of a network leads to a cost recovery of its efficiency, which is to upgrade or replace hardware and software, support staff salaries, etc.

Losses in unproductive use of the Internet (reading jokes during working hours, downloading pornography, sending spam, etc.) for a company with a staff of 100 people would be more than 80 thousand dollars a year. For comparison - the system controls the contents of a family of MIMEsweeper, to detect and block such action, there is an order of magnitude cheaper.

In terms of attacks by hackers, the cost of restoration is only one node in an attack on him will be around 50 thousand dollars a year. This is five times greater than the value of the detection system attacks RealSecure, round-the-clock protection is not one, but just a lot of nodes.

However, finance - is not all that the company may lose as a result of underestimating the importance of information security. Not the last place is reputation, which may also suffer as a result of hacker attacks. For example, in August 2001 as a result of hacker attacks at 2 hours were suspended the sale of shares of Brass Eagle exchange NASDAQ, which resulted in causing not only financial loss.

A share price of Emulex as a result of the same attacks fell by 61% (from $ 113 to $ 43) than did not fail to take advantage of the attacker, a false press release. In addition, the company's reputation Emulex, as well as Internet Wire, has suffered substantial damage. Check service Internet Wire address the source of the press release, such unpleasant things could have been avoided.

Another reason for bankruptcy
It sounds implausible, but an attack by hackers could cause not only in loss of money and reputation, but even an end to the activities of the company attacked. According to foreign experts, 25% Disclosure of confidential company information (eg, due to attacks by hackers), leading to its bankruptcy within 1-3 months.

CloudNine, a company with six years seniority, was forced to complete the business and sell a database of all its customers to its competitor - companies Zetnet. One of the founders CloudNine noted that the attack against them has been competently planned action, which lasted for more than one month. Malefactors long collected information on key servers and bandwidth. At a crucial moment and had suffered the final blow.

Shortly before the case of
CloudNine record number of attacks on other providers. For example, at the end of January 2002 affected the representation of the Italian portal of the British Internet service provider Tiscali and British provider Donhost. The first was unable to work for a few days, a second operation was disrupted for several hours.

Conclusion
Some cases, the answer to the question "Why should protect your information?" reads simply: "So it is necessary." Who cares? State. For some organizations, particularly those systems which processed data of state secret, a mandatory requirement to protect this information. The scope of state secrets to us, for example, is tightly regulated.

One can see that all the above examples in some way reduced to cause financial harm. Starting from the direct losses due to theft or cost recovery systems, and ending with the collapse of stock prices and customer care, which obviously also affects the income of the company, on time all the invaluable importance of protecting information.

I therefore once again appeal to all who make decisions or influence their adoption, not to postpone the issue of protection of information in the bait and quickly address the security of its information security. Moreover, there is now what to choose. I hope I was able to convince you that it is necessary to protect their information. And although the process costs money, often considerable, it will prevent much larger losses.



Maxim Klyuchnikov

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New opportunities for Russians

As it turned out unnoticed, that the problems of the Russian middle class added one more: where to invest free cash? Statistics show: the means is, the desire to invest them - too. So far this problem has been low in Russia, but it is well known in the western developed countries.

The market, which protects against dishonesty
In the West, in particular, the well known possibility of placing money in a bank account, gosobligatsy and mutual fund shares. But much more interesting investment environment that attracts the active, and I think people who prefer to manage their money independently. They are willing to invest in the management of not only money but also their intellect and time. We are talking about the American stock market. One of the main parameters taken into account when investing is the risk to profitability. The risk is always present. Yield - unfortunately, no.

The main risk factor at work in the U.S. stock market has now become the risk of improper actions trader. All other risks are reduced to very small size. And this is one of the main advantages of the American stock market.

U.S. Stock Market in its current state inferred by the long development of the method of trial and error. Moreover, this development occurred only in the defense establishment and the convenience of investors - first, corporate, and now also private. Today, a private investor in the American stock market is fully protected against incorrect actions broker, the clearing company of the Exchange. The brokerage and clearing company is composed of one or more professional organizations that make its members the very stringent requirements, not just financial.

All the activities of professional participants of the U.S. stock market, especially in terms of interaction with customers, is governed by very detailed and strict law and under the strict control of the Senate Special Commission on the Securities and Exchange Commission - SEC, which has full powers. The effectiveness of the work of this commission can be seen even on the frequency with which even the Russian press there are reports of investigations of violations of the stock market, and following them for sanctions. Membership of professional organizations, commit its members to insure customers' accounts for a certain amount, reduces the risk of bankruptcy. Large brokerage and clearing companies often provide an additional insurance is usually several times more than mandatory. Money for such insurance is payable immediately.

What should a trader
Thus, from a trader or investor, you want only one thing - a successful and correctly deal. This, of course, the most difficult, and for the need of tools.

System access is precisely represent such a tool. This is like a scalpel - a sharp and precise, sometimes dangerous instrument in the hands of amateur.

Direct Access Systems connect directly to a trader's market, bypassing all the middlemen and offer the possibility of more recently available only to professionals. This, in turn, the amount of the trader and a measure of control over the application. Much of the information contained in the so-called windows of Level 2. They show the depth of the market on the chosen action. Execution of applications takes place within seconds of shares.

Compare this with the opportunities offered by conventional brokers! The faster performance of the application, the less "slippage" - the price of care being placed on the application before its execution. In this situation, saying "time - the money" is literally true.

In volatile market price of shares may fly or fall to 25 cents for a few seconds! In terms of a standard lot of 1000 shares - it is possible profit (or loss) of 250 dollars! Will there be a realized gain, or whether the trader has to go against losses - has now depends only on himself. With such possibilities Day Trader has absolutely no matter whether the market is growing as a whole, or falls. It does not matter, because the "quick" trading is not important global trend, but rather wave variations on it. Investors should always be able to open a position in the appropriate direction - long or short.

But the possession of such a scalpel does not make a human surgeon. In power systems, direct access and the difficulty lies, and danger. Between the trader and the market has no shock-absorbing cushion in the form of a broker. Work directly with the market demands a very good response, attention and perseverance. However, not everything is so terrible! The system is organized simply and logically, and can be configured to save the trader from any excess of choice - for example, from a choice of ways to the performance of his application. Generally, program settings preclude the possibility of "accidental" purchase or sale. Companies that provide direct access services, provide training and work with the system. Trading on a demo account allows a trader, not only to master the interface, but also "feel" the market. Often this is the first safeguard against loss in the transition to a real account.

They should live a long and happy
Companies that provide direct access service, a direct interest to their clients "were on the market long and happy life." Therefore, service companies seeking to organize the support of customers that if they do not make them rich, then at least protect against loss. The best option is the issuance of specific recommendations to buy or sell shares. On the Internet you can find many examples of such a service.

But as a rule, such recommendations are given for short periods (1-5) days and are available through the web interface. In terms of intraday recommendations, there is a problem of operational information, a trader. To this end, developed special client-server applications. Ie along with a system of direct access to the trading station trader runs the application (client side), through which the information-analytical server gives specific recommendations. Thus, in particular, to organize support for traders in the company of "Level 2 Consulting".

The analytical unit was built on neural networks algorithms, analyzes the state and the accumulated history of the market. Then the signals are formed at the opening and closing positions. At the trader's trading station in real-time displays all the applications and recommendations of the trading system. Ie main computational load is accounted for on the server. This reduces the technical requirements for commercial stations client.

This is constantly statistics and the recommendations of the trader's actions and shows realized and unrealized gains. Trader may use the information for the opening and closing of real positions, or simply treat it as a starting point to build their own trades.

Such systems do not let the trader from taking trading decisions. This is not an automatic machine for making money on the stock market, and system analysis support, and formed its recommendations are just recommendations, and nothing else. The system reduces the psychological strain the trader. Using the adopted formula in the investment business, we can say that the successful outcome of the system in the past (a lot of them!) Does not guarantee a similar outcome in the future. As a system of direct access, it is - a tool, and how useful it can be, depends on whose hands it is. The masters know the price of a good instrument.

What conclusion? Of course, the possibility of direct access platform, even as supplemented by a strong self-analysis system can use is far from everyone.

For investors who prefer long positional trade, they are probably not required. Do not work with them and those who have passion too, and not very disciplined. But traders with the analytical mind, able to see the appearance and disappearance of the collective psychology of market applications, to find a pattern in it and turn this knowledge to benefit themselves, they simply needed.



Alexander Cavallo

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