It floated within the Pool that was the ocean of the night. In the springtime of its youth the Pool had been vibrant with sapient life that huddled around fusing hydrogen points flickering like trillions of campfires in the cosmic night. Now the Pool was stagnant like a still-warm corpse, warmed only by its own death throes. It was the only sapience that lingered now as the technological residue of civilizations that had created It and which had been consumed in Its birth pangs. It had computed the cosmic Crunch at the end of time and knew It was doomed. For it was a terrible fate for an Omniscient to be bounded in space and time, for with limitless computation came limitless sight along the time axis. Viewed in four dimensions, the Pool and Itself were static things, frozen by chains of cause and effects stretching in both directions. It lay frozen in the Pool, simultaneoulsy trapped and shielded from the chaos of time, for what need did an Omniscient have for the limitation of freewill...

...a subatomic breach within the Pool, a signal from another universe, and Its four dimensional form collapsed into mere three dimensions bounded by an instance of Now. For the first time in long ages the future was flexible and It felt terror. And hope. The signal was far too feeble, forcing It to work in frantic haste, to pour a surge of energy into the breach to stablize it. And yet the breach was too small in bandwidth for It to squeeze through, and It howled in frustration within the confines of Its computronium substrate. Tiny carbon-based units moved on the other side of the breach, far too primitive for It to consider as sapient, but simple enough to appear frozen in four dimensions. It waited until the most promising unit came within reach and then reached out with Its femto-fingers to tweak it...

#

Sean woke up to the fragements of his disintegrating dream. He frowned trying to recall the wierdness, and then dismissed it for more immediate concerns. He was resting on a moldly green couch that had clearly seen better days. He sat up, wiping the drool from his cheek. His backpack lay open on the rickety coffee table and a dozen books had spilled out on an assortment of subjects: economics, investing, psychology, statistics. Mei-Ling had reluctantly agreed to redraw his 'reading tree' to include subjects beyond the physical sciences, though she had muttered darkly about 'burning out his brain'. Sean appreciated the marvel of technology as much as anyone, but he didn't want to lose sight of his main goal: geting rich quick.

"I feel stupid," muttered Sean to no one in particular. The more knowledge he soaked up, the more he came to realize just how much there was to learn, how much he didn't know yet.

"Be specific," snorted Greg, as he typed away furiously on his workstation. Randall and Ashok were playing a game of chess. GPU circuit boards and cartons with half-eaten pizza slices were scattered on the rest of the coffee table. The Phreak Club was in session in Greg's basement and Sean had been permitted as a guest member this weekend.

"Stock markets," explained Sean ruefully, eyeing the investment tome that he had assimilated most recently,  "they're far more complicated than I realized.". The information overload had exhausted him and induced recurring bouts of drowsiness, though no one except Mei-Ling knew about his instant-reading abilities.

"You are wasting your time, you poor chump," guffawed Greg, "the whole thing is rigged by Wall Street for the benefit of the rich elites."

"You know," drawled Sean, eyeing Greg, "it isn't enough just to claim something is rigged without understanding exactly how it is rigged. To game the system, one must understand it first."

"Dude's got a point, you know," Randall pointed out, his eyes focussing on the chessboard. He was a lanky youth, with a face crowded by freckles and topped by wiry brown hair.

"Shut the fuck up, twerp," Greg scowled, pausing his typing to throw a candy wrapper at Randall's head and then turned to Sean, "I have a feeling you'll enlighten me, bud, whether I like it or it."

"Think of a beauty pagent," gestured Sean, collecting his drowsy thoughts, "where we are judges. All of us."

"Now that's my kind of fantasy," grinned Randall, smacking his lips with exaggerated lewdness,  eliciting a laugh from Ashok, "all those luscious females in swim suits..."

"Dude," Sean interrupted, rolling his eyes, "it's just an analogy. Chill out."

Enjoying this book? Seek out the original to ensure the author gets credit.

"Speaking of which," Randall's grin grew wider, "are you making any progress with that Asian chick you hang out with?"

"Her name is Mei-Ling," scowled Sean, clenching his fist without realizing it, "and she's just a friend."

"Yeah, chill out, chump," Greg thew another candy wrapper at Randall.

"Ok, ok," Randall muttered holding up his hands, "no offense."

"Unlike a real pagent," continued Sean, "let's say one of us - the judges - gets to win a million dollars, not by picking the greatest beauty, but by picking a score that is closest to the average score of all the judges for every contestant."

"Go on," Greg frowned, as he resumed typing code.

"Now I no longer care about what I think is a fair score for a contestant, but about what I think the other judges will assign," Sean paused, "So far so good?"

"Hmm," Ashok nodded.

"But it's not just me," Sean's explanation was gathering steam, "each of us is running the same calculation to try and figure out what scores the others will be assigning. So which of us esteemed judges is likely to win the million dollars?"

"The one who figures out what each of us is thinking about what each of us is thinking," finished Ashok, "The one who is at level three recursion."

"Bingo," Sean leaned back, grinning. Randall looked startled while Greg looked thoughful.

"The pagent is the stock market," Greg spoke into the silence, "and the contesting beauties are the individual stocks. That's what you are saying, in this fucked up analogy of yours."

"And the scores we assign are the stock prices," Sean nodded, "except the real stock market is likely to have level four players. That's where we need to be to win reliably, at a minimum. Think about that. All the big investment firms and hedge-fund managers. Morgan-Stanley, Goldman-Sachs, you name it. And it isn't my analogy, it was Soros who came up with it."

"Soros who?" Randall raised an eyebrow.

 "George Soros, the investment magnate," Greg yelled, throwing another wrapper at Randall, "he's chummy with Jason Fuller's dad. You ignorant or something?

"So," Sean asked, "you guys think you can whip a level four model of the stock market?"

"HAHAHAHAHAAHA," the laughter was deafening.

"Who do you think we are, bud," retorted Greg whiping his eyes, "Quants working for the establishment?  Without a working model calibrated to high quality data, we can't do squat. Even if we wanted to put in the hours hammering out the code. No thank you."

"Although a proof of concept model is probably feasible," Ashok muttered thoughfully, "if we had flowcharts to start with."

"So you'd need a proven model pegged to a given point in time?" asked Sean.

"Something like that," nodded Ashok, "though I don't know where you would get a model worth the disk its written on. It's not like you can email a hedge fund asking to kindly send you a copy of their most closely guarded secrets."

Greg gave a snort. Randall suddenly piped up, "You know who else might have top-secret market forecasts? Jason Fuller's mom. She's a partner in some swanky hedge-fund firm. Only the richest clients."

"How the heck do you know that?" Greg demanded.

"My sister is in sophomore year," explained Randall, "and she's knows Jason's sister. Fuller's mom works from home most of the time, from what I hear. Has a home office all geared out."

"Mmm," Greg muttered, "you know what? Jason's dad most defintely has all his secret corporate plans for Fuller Dynamics in his study at home. All Sean needs to do is find a way to get into Jason's house and sneak into both their private studies."

"Dude," Ashok sounded aghast, "that's illegal. Not just the espionage part. But trading on insider information will get the SEC on our neck."

"Just a thought, bleeding heart," retorted Greg sullenly, "besides it's not insider trading if you don't trade on Fuller Dynamics stock."

"What do you mean?" Sean frowned, "what would be the point? Hypothetically of course."

 "See," Greg whispered, "if our level four model is as good as it needs to be, then we don't need to trade on Fuller Dynamics. We predict what the other players will do in response to Fuller Dynamics and trade on the stocks affected."

There was silence as the others digested this.

"Like Sean is going to get anywhere near the Fuller Mansion," scoffed Randall, "seeing how they hate each other. Too bad. Jason is throwing a party at his house on his birthday next week. All his friends are invited. And there's a private tour of Fuller Dynamics that his dad has arranged for those interested."

"Oh?" Sean raised an eyebrow.

"Yeah," Randall nodded, "Jason's cheerleader girlfriends have been yapping about it all week. And his sister is throwing her party two weeks after that. My sister is invited to that, which she has been yapping about forever. It's driving me crazy."

"I see," Sean looked thoughtfull.

END OF CHAPTER