Every institution in this, platform, and specially models claims “stability” – until it collapses. Let’s cut through the theater: The illusion of stability persists because we mistake confidence for control. Every system—financial markets, tech infrastructure, government institutions—relies on three fatal assumptions: that adaptability keeps pace with change (it doesn't; stability breeds rigidity), that variance operates within predictable bounds (it can't; black swans dominate real-world outcomes), and that confidence reflects actual competence (it often masks institutional blindness). The stability index : Is=Confidence/(Adaptability×Variance)Is=Confidence/(Adaptability×Variance) reveals this deception mathematically: when confidence grows without proportional improvements in adaptability or honest accounting for variance, systems become dangerously brittle. We've seen this play out repeatedly—in the 2008 collapse where risk models (Is≈4.5Is≈4.5) failed to account for correlated failures, in tech outages where "five-nines reliability" (Is≈2.5Is≈2.5) crumbled under unanticipated cascade effects, and in pandemic responses where bureaucratic inertia (Is≈1.8Is≈1.8) outpaced viral adaptation. The pattern is universal: stability claims intensify as systems approach critical fragility points. This isn't academic—it's a fundamental design flaw in how we build and regulate complex systems. We reward the appearance of stability while punishing those who point to mounting vulnerabilities, creating a perverse incentive structure that guarantees eventual failure. The solution requires inverting our priorities: treating confidence as a liability rather than an asset, designing systems that improve under stress (negative IsIs), and replacing static risk models with dynamic stress tests that probe for unknown unknowns. Until we do, every "stable" system remains a catastrophe waiting to happen—its collapse predetermined by the very metrics meant to prevent it.
In the words of Gordon Gecko "Greed is good" until it's not. I just had the same conversation with my previous broker saying they should have been managing risk a year ago at the top. Not knee-jerk reacting at the bottom. Before anybody says how do you know it's the top? If you don't know what a top or a bottom looks like you've got bigger problems. I called the top that we just experienced almost a year ago. Anyway, stocks are like real estate...everybody's buying when the market's roaring which is counterintuitive.
I hear (read) what you are saying, and I agree that absolute stability is not possible, but that doesn't stop sophisticated players getting rich off the propositions of stability/instability or collapse.
It is impossible to know all the variables. There are known variables, unknown variables, and unknowable variables. Without knowing the variables it is impossible to be 100% mathematically correct or have a 100% stable, predictive system. The best we can do is extrapolate and project likely scenarios. Hence we need mechanisms to activate processes when our projections are wrongsided.
start with a conclusion and work backwards to create a Mathematical Lie. I like this formula instead Code: I = confidence * adaptability / variance
That is a nice variation to a well known saying " there are known knowns; there are things we know we know. We also know there are known unknowns, that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know. Donald Rumsfeld, former Secretary of Defense
I think systems don't hold up cause government reports and interest rates which are governed most of time by the government. Housing is huge, reduction of people buying, less furniture, appliances and new car. Trucking stocks, if they not going up, expect downturns, if more bankruptcies by trucking companies, means less freight and many going down. I been going short/hedged Indexes for a few years, hundreds of trades. They always showed topping formations, if not for hedges I be broke but came out ahead a little. And to better know when turning patterns show up to hedge open profits. I only use time based charts. Regardless if new highs stops out positions, be best year in a few long term. Starbucks time