[late2part]

Here's what I think he means.

If you look at trends over an arbitrary period, they may look useful.

If you look at the similar trends over a larger period, they look different.

Therefore, the smaller periods are just random variations relative to the larger periods.

[xapata]

Close. It's more a comment on the structure of those random variations, and whether it's appropriate to describe the system as periodic at all.

For example, sometimes it rains, and sometimes the sun shines. Is the weather cyclical? Depends on the place, time, and time-scale you're considering.

Maybe a better example is roulette. If you watch the "cycles" of red and black, you might imagine you could make predictions. Gamblers are often fooled by this randomness.

[lordnacho]

This is a good observation that I upvoted because it's very relevant. A lot of things look like cycles but have no oscillating dynamic, it's true.

But you could suppose that business cycles are caused by a build-up of bad debt. Things to well, debts can be paid, collateral gets worth more, more investment, etc. This can't go on forever and the reverse cycle then occurs, often as rates come up. Soros store about this and called it reflexivity.

Of course I'm not saying business cycles are definitely caused by this, there's probably more to it than that. But it's a common explanation.

[xapata]

> caused by a build-up of bad debt

Why does it build up? A generalized autoregressive model explains that just as well as an oscillator does. The key difference is how predictable the periods are. The more waves you're composing to force the oscillator model to fit, the less likely it's appropriate.