Quantum Economics

[FrodeauxB at aol.com]

Subj:    Scientists Discover Super-Dense Corporate Cluster
Date:   7/1/01 11:53:05 AM Central Daylight Time
From:   fff at futurefeedforward.com (futurefeedforward)
To: frodeauxb at aol.com



March 11, 2118

Scientists Discover Super-Dense Corporate Cluster

BOSTON--A team of scientists at the M.I.T. High-Velocity Monetary Object 
Observatory announced on tuesday the discovery of a "super-dense corporate 
cluster" localized in mid-town Manhattan.  The first structure of its kind to 
be observed, the cluster raises profound questions about the relationship 
between the physical and the economic worlds, and lends credence to the 
controversial new discipline known colloquially as "quantum economics."  
"Most great breakthroughs begin with great observations," notes M.I.T. 
Assistant Professor Marguerite Fury, leader of the research team.  "And this 
is a truly paradigm-shifting observation.  Physics and economics both just 
got much more interesting."

    The cluster, dubbed AA-1, is a "binary system" consisting of two, 
interrelated, capital-dense companies and a surrounding cloud of smaller, 
lighter firms drawn to the two central giants.  AA-1 differs from other 
large-scale corporate partnerships and joint ventures because the two giants 
involved are linked through a peculiar ownership relationship known as a 
"mobius control stitch."  Professor Fury explains:  "The two giants in AA-1, 
AOL and Amalgamenture, each own majority stakes in the other.  AOL owns 52% 
of Amalgamenture, and Amalgameture owns more than 60% of AOL.  This sort of 
thing happens occasionally in the course of hostile takeover and defense 
maneuvers, but usually resolves itself relatively quickly.  The AA-1 stitch, 
though, has persisted for more than 40 years, largely because of the 
unprecedented size of the two linked companies."

    The "stitch" linking the two companies creates a "control paradox."  "The 
cluster is characterized both by a management surplus and a management 
deficit," explains Professor Fury.  "There are too many managers for the 
interlocked firms, which should be one firm with one management team. At the 
same time, there are too few managers.  The board of directors of each 
company leads the companies separately, but nobody leads them together.  This 
paradox creates an oscillating control vacuum that sucks in, alternately, 
firms that are control weak and control strong.  The cloud surrounding the 
stitched giants is thus saturated with merger and spin-off transactions."

    In addition to attracting the swarm of merging and spinning corporations 
that compose the cluster's characteristic cloud, AA-1 is also responsible for 
"spontaneous transaction pair production" attributed to a "large magnitude 
debt/equity density differential" between the two giants at the focus of the 
cluster.  According to the team, the two giants belong to different 
"classes."  AOL is a conventional multi-national, characterized by globally 
disbursed operations, large employee base, and significant current assets and 
free cashflow.  Amalgamature, in contrast, is a "super-leveraged holding 
firm," with significant free cashflow, but debt orders of magnitude greater 
than equity and with nominal staff and a single Manhattan office.

    Professor Fury elaborates:  "The density differential at the heart of 
AA-1 generates an asymmetric transaction space in which independent 
transaction processes form.  This sort of formation happens all the time in 
regular clusters, but the two sides of the transaction collapse into a single 
process almost instantaneously.  In AA-1, for the first time, we've been able 
to observe buyons and sellons before they collapse into a transaction, giving 
us new and invaluable insight into the way transactions form."

    According to the M.I.T. team, AA-1 is a unique system, at least for now.  
"We're very lucky that our discipline is gaining steam at just about the same 
time that complex monetary objects like AA-1 are forming," notes Professor 
Fury,  "but AA-1 is just the beginning.  We anticipate that the next hundred 
years will see capital formations that dwarf AA-1 and produce wondrous 
effects we can't yet imagine."

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