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================================================    Thursday, January 8, 2004
More on IBS - Chaos and the Butterfly Effect

Hello everyone,

I hope you had a great new year celebration.  Last week, January 1, there was no newsletter, other than best wishes for the coming year and for you to have a wonderful relaxing holiday. 

IBS - the Infallible Baccarat System has been the talk of the gambling world on the internet for the last 3 weeks, and I can say that this is the system that has received the most attention out of all others.  After numerous debates, discussions, inquiries, feedback,  trials, tests, proofs, it's agreed now that IBS is one of the best if not the best gambling system that is out there to win Baccarat, which comes as close as possible to perfection. 

The only requirement that bothered most acquirers of IBS was the fact that one needs a fairly large bankroll to beat most of all Baccarat shoes.  To that effect, a split bet technique was introduced, by the use of which, still most shoes are overcome, and with much less bankroll and the betting unit not to exceed a certain limit, with which players feel comfortable.  This new document is now incorporated into the system document and all purchasers of IBS have received a free upgrade.

 In fact, due to those requests, I am putting its price back to $500 for a limited time, so it will be affordable to anyone who would like to purchase it and benefit from possessing one of the greatest systems ever. 

Winning about 15 units per shoe and $20 minimum bet unit, IBS will provide you with $300 profit, paying off its price 3 fold within one shoe only.  Click here to read more about it and place your orders.  You will find there an FAQ section and testimonials from numerous satisfied users of IBS.

And now to the main subject of this week's newsletter: Chaos and the Butterfly Effect.  There were 2 articles published on this subject, one in Washington post, where I was mentioned for my work in fractals and one in my forum that I picked up.

And here they are:

"Chaos" describes the apparently random behavior of systems which are actually exhibiting very mechanical behavior. Most people think of physical behaviors as being either deterministic or random. If you know the starting conditions in a deterministic system, you know exactly what the future behavior will be. In contrast, random systems are unpredictable. Much to the frustration of scientists, numerous systems seem to be random. In particular, weather, vibrating structures, and subatomic particle I dynamics are considered random, and most scientists have simply settled for statistical descriptions which are poor for drawing any concrete conclusions.

An emerging field of science has revealed that many systems previously believed to be random are actually described by systems of deterministic mathematical equations. Prior to the availability of computer graphics, such chaotic systems were difficult to visualize. However, it is now possible to visualize chaotic systems from which emerge elegant patterns such as in Izak Matatya’s computer graphics, fractals and "strange attractors", thus giving rise to the phrase "order out of chaos."

Izak Matatya also happens to implement betting strategies for hazard games with random outcomes. His superior knowledge of statistics, mathematics, computers and sublime taste of graphic art is a wonderful contribution to solutions in chaos theory. His betting systems have a solid background and his analysis of random pattern correlations are above any level seen so far.

An essential characteristic of a chaotic system is its sensitivity to tiny differences in initial conditions. Any difference in a chaotic system's initial conditions grows exponentially as the system evolves over time. Eventually, the magnified difference results in apparently unique and random behavior despite the similarity of the initial conditions. Even though full knowledge of such conditions would in theory permit long term predictions of a chaotic system's behavior, it is impossible to know them all to the infinite precision necessary. Thus, we may possibly never make reliable long term weather predictions.

The "Butterfly Effect" is a popular example of the importance of seemingly negligible initial conditions. As recounted by Edward Lorenz in "The Essence of Chaos", the phrase has a curious history. It appears to have arisen after he presented his paper entitled "Does the Flap of a Butterfly's Wings in Brazil Set Off a Tornado in Texas?" A computer graphic of a chaotic system studied by the author resembled a butterfly and many people assumed the coincidence was intentional. Others point to Ray Bradbury's classic story "A Sound of Thunder" in which a time-traveling hunter steps on a butterfly while stalking a dinosaur and finds his world changed upon his return. Edward Lorenz points out that “perhaps the butterfly, with its seeming frailty and lack of power, is a natural choice for a symbol of the small that can produce the great.”

Where it is possible to reasonably manage most of the details, chaos theory has solved scientific problems, such as why the asteroid belt has empty bands. The reason is that each time an asteroid passes Jupiter, it feels a gravitational tug. If the distance of the asteroid from Mars and Jupiter is correct, i.e. the asteroid is in a suitable band of the asteroid belt, it will feel periodic tugs which result in chaotic motion and cause it to drift out of orbit. The chaos-inducing resonance only occurs when the frequencies of the tugs are related by low-order rational numbers, hence the appearance of specific gaps in the asteroid belt.

When a butterfly flaps its wings in Maui, does it cause a hurricane in the Caribbean? Or, a tornado in Kansas? Or, a rainstorm in Shanghai? "The Butterfly Effect' is a familiar parable that illustrates how outcomes are dependent upon initiatory conditions. Even grand events -- like hurricanes, tornadoes, and rainstorms -- are ultra-sensitive to the smallest influences.

The notion goes something like this: (1) A butterfly on a small tropical island flaps its wings. (2) The minor disturbance creates an air current that carries out over the ocean. (3) The deviation adds to the accumulative effect on global wind systems which are constantly in motion. (3) The result is an apparition of weather in different parts of the world.

"The Butterfly Effect" has become synonymous with chaos theory. Chaos theory postulates that small changes at the micro level can lead to much more significant consequences at the macro level. A more scientific explanation is that making small changes in initial input values impacts the final outcome of the progression. Using a mathematical example -- if I were to add .0001 to any simple equation, no matter how large the number, the final answer would be altered because my disruption. No matter if I add .001 to the number 3, or 3 million -- the impact is the same. Hence, a butterfly flapping its wings can and does change the weather half way around the world.

If The Butterfly Effect can account for weather changes, might it also apply to other worldly events? If you are a believer in chaos theory, the answer should be obvious:

History -- In 1914, an obscure political leader was assassinated in Bosnia. It all started with a tiny newspaper clipping that was mailed from a secret band of terrorists in Croatia to their comrades in Serbia. The article declared that Austrian Archduke Franz Ferdinand was to pay a visit to nearby Sarajevo. The clipping was the torch which illuminated the idea of an assassination attempt. Archduke Ferdinand's death a few days later sparked a cataclysmic chain of events that instigated World War I. Four years later, 25 million people were dead and new national boundaries were drawn. What might have happened if that tiny newspaper clipping had been lost in transit, or the assassination attempt had somehow been foiled? How might history have changed? How different would the world be today? Without World War I, would World War II have occurred? Or the Cold War? Or atomic weapons?

Finance -- Slight fluctuations in one economic market can effect many others. In June 1997, Thailand ordered 16 finance companies with high levels of bad debt to merge with healthier ones. Thailand's currency (the baht) quickly plunged more than 20 percent in currency exchange markets. Next, Thailand asked for a bailout from the International Monetary Fund. This triggered economic instability in other Asian markets -- including the Philippines, Malaysia, Hong Kong, Indonesia, South Korea, and eventually Japan. In November, a drop in the Tokyo stock market made it abundantly clear that Asia was in the midst of a severe economic crisis. Declining markets in Asia soon impacted all foreign markets, including the United States. Some economists later suggested the Asian crisis created a global recession. Might today's economy be different if a few financial institutions in Thailand not made so many questionable loans?

Biology -- Many scientists believe that a small, once seemingly insignificant virus in African monkeys mutated into a deadly disease that now effects human populations all around the world. It's been hypothesized that the HIV-virus originated in chimpanzees found in the rainforests of Gabon, Cameroon and parts of Nigeria. Later, humans contracted the deadly virus. What horrific mutation triggered this global epidemic? Biological mutations are only a tiny fraction of the size if butterfly wings. But the aftermath of these microscopic changes can be catastrophic for millions of people. Think about it.

Psychology -- Thought patterns and consciousness altered by small changes in brain chemistry can produce extraordinary human behavior. Seemingly trivial impulses inside the cerebellum may inspire the creation of great works of art by some individuals -- and terrible acts of crime by others. Mental delusion motivated one man to paint several masterpieces (Van Gogh) and another to commit murder (Son of Sam). In fact, the human brain may be the most volatile laboratory of chaos theory set in constant motion.

Religion -- A little over 2000 years ago, a man was born in the Middle East. Despite never attending school, or writing a book, or holding a position of authority -- he would go on to change history and alter billions of lives in successive centuries. But what if the man had never lived? Or, what if he had not lived beyond infancy? Keep in mind that infant mortality rates were 30-40 percent in his time. What if Jesus had died before he reached adulthood? The same question goes for Moses and Muhammad. How would our belief systems -- including our morals and ethics -- be different in modern society if these great men of history had never lived?

If the pitter-patter of butterfly wings causes hurricanes and heat waves, if molecular agents can either kill or cure millions from infectious diseases, just imagine what you or I can do -- much larger human forces with a more profound physical impact on the people and objects around us. Just as chaos theory is manifested in our worldly experiences, it is so in gambling, as well.

Examples of chaos theory abound in casinos and are revealed in all games of chance -- from roulette wheels to card games. Inside card rooms, there's a seemingly chaotic ritual that recycles vast amounts of wealth and time, chip by chip and hour by hour, slowly but surely transforming its cast of characters into a primordial pecking order of winners and losers. Every batted eyelash and hand gesture inconspicuously alters the course of events which follows. A cough or sneeze may go unnoticed but can make a poker dealer shuffle the cards in a slightly different manner than he would otherwise, thus changing "poker history" by altering the outcome of the next hand, and the next, and the next -- ad infinitum.

One of the most interesting examples of The Butterfly Effect was once told by Phil Hellmuth, who recounted a story several years ago involving Dan Harrington, winner of the 1995 World Series of Poker. Hellmuth was in a unique position to observe what happened that day, because he sat at Harrington's table when a monumental hand took place which may very well have changed poker history.

The key hand occurred in the $2500 buy-in no-limit holdem event, which preceded the $10,000 main event that same year. Harrington decided to enter the event merely as an afterthought. He hadn't done much in poker tournaments up until that time, and was primarily known for his tight play in no-limit side games. Down to seven tables in the tournament, Harrington was dealt A-J. One opponent from early position made a $600 raise with pocket jacks. Another player in late position called the raise with pocket eights. Harrington (a player with a very tight reputation at the time) decided to re-raise $2000 more with A-J. Knowing Harrington's style, the first player mucked his J-J. The other player called the raise with 8-8. The flop came all rags (helping neither player). After it was checked, Harrington moved all-in with his last $6500 hoping to take the pot right there. The opponent called and Harrington knew he was in big trouble. The turn was a blank as Harrington stood up ready to walk away. The river card was dealt. It was a jack -- giving Harrington the pot.

Hellmuth, who was watching the hand, later noted that several things had to go just right for Harrington to pick up that key pot. First, Harrington had to get out of line with a relatively weak hand (highly unusual for Harrington). Then, the player with J-J had to respect Harrington's game enough to fold pre-flop. Then, the player with 8-8 had to call the raise. Next, Harrington had to move his stack in after the flop and get called. Finally, he had to hit either an ace or the case jack to win the pot. Harrington succeeded in doing so, and went on to win his first major poker tournament. A week later, he was the World Champion. Then, a month later Harrington won the European poker championship. What an amazing run!

That incredible sequence of events started with a single card coming at just the right moment. Meaning no disrespect to Harrington, it's quite possible that poker history took a jolting detour because of what happened on that one hand. Scooping that pot gave Harrington a sizable stack, as he became more aggressive in the tournament. He went on to win this first gold bracelet. Loaded with self-confidence, he proceed to win the next two no-limit events he played entered -- and the lives of countless other poker players on the tournament trail were affected by his wins (since the order of finish in every event thereafter was altered). In fact, one could make a rather persuasive argument that every motion, every action, and every hand has an impact on the ultimate course of events which follow.

Every poker player has memorable moments, recollections of key hands that might have altered their state of affairs. Had Scotty Nguyen not won a seat in a super satellite in 1998 would he have gone on to win the World Series that year? What about Stu Ungar? Had it not been for a last minute phone call from a backer, Ungar would not have had $10,000 to buy into the 1997 championship and won his third title. How about Chris Ferguson? His fateful moment all came down to a three-outer on the last card of the 2000 World Series. How might his life (and TJ Cloutier's) be different today had that A-Q held up versus the A-9?

The biggest poker events aren't the only places where lives are in a constant state of transition. Even small stakes games have ramifications that can reverberate throughout the poker world. A pebble thrown in a pond today might create a sonic boom tomorrow. How many future world champions are now toiling away in $4-8 holdem games trying to learn the game as you are reading this right now? How many players around the world are catching a key hand right this moment which gives them the confidence to go out and buy a book and want to learn more about poker? A year later, that player wins a tournament. Then another. The next year, the player wins a gold bracelet. It's happened. Many times.

Poker and history are connected. How many great poker players like Erik Seidel once lost their jobs and took up poker playing as a profession? How many professional players dropped out of college because they were making more money at the card table than any entry-level job? How many great poker players were expelled from foreign countries, and how might poker be different today if the Vietnam War had ended differently? How many fortunes have been won and lost, how many marriages and divorces have occurred, and how many lives have been changed for better and worse by what happened in a poker game? Fate is as fragile as the wings of a butterfly.

Wishing you all the best,
Until next week,


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