I keep seeing that IBM “math can make the world better” ad on tv during the football game. The second guy on the ad says:
Math can help predict financial markets.
You’d think they might have edited that out after all this stuff.
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Fritz
I’m rather surprised that the abject failure of computer modeling to predict last year’s disasters in the financial markets have not led to more questions about the wisdom of using computer modeling of climate systems to drive insanely-expensive government environmental policy.
DougJ
You can’t spoof a spoofer, pal.
Brandon
Since, you know, financial models=climate models.
By that same token, we should probably outlaw those models NASA uses to calculate orbits for spaceflight, since financial models have been such a failure.
Zifnab25
You can’t piss on computer models when you are working with bad data. 2+2 only equals 4 if you’ve got the equation right. In truth, they were dealing with 1+0. Mortgages on the books just weren’t worth what people said they were. Math models never work when you lie to them.
Zifnab25
As for climate models… Who needs them? The fundamentals of our ecology are strong!
GuyFromOhio
You cannot use ‘computer modeling’ to predict with any accuracy the herd mentality of stupid greedy rich people, and the hacks ripping them off within plain sight of the organizations charged with enforcing the regulations that (supposedly) govern them. Conversely, greed has forever been its own undoing, and you hardly need a computer to figure that out.
However, extremely large data sets collected over a century across a fixed domain lend well to pattern recognition and forecasting across that same fixed domain. Things like median temperature, carbon dioxide levels, ice pack coverage, hurricane landfall probabilities, deforestation and annual rainfall are all discrete, measurable and recorded, and a far cry from "Black Monday"s, insider trading and Bernie Madoff’s account numbers in the Cayman Islands.
And I’m thinking one of those snappy Ram pickups would look cool in my driveway.
DougJ
It’s just mental warming.
GuyFromOhio
That sounds like one of those "hot-bottom topics."
Fritz
Actually, I would think that the herd mentality of stupid greedy rich people should be pretty easy to model.
Bob Munck
Even ignoring the epic fail of the ongoing financial collapse, in what way does "predicting financial markets" make the world better? It’s obviously good for the person or group doing the predicting (assuming their prediction is correct and they take advantage of it), but it seems to me that this is a zero-sum game. The gain for those individuals is a loss for the rest of the market as a whole, a loss for the greater good. They are adding either "friction" or "inertia" to the running of the financial system.
I haven’t seen these commercials (praise be to TiVo), but I imagine they’d make my wife (math major) and me (applied math major) crazy.
DougJ
Good question.
GuyFromOhio
The RNC has been doing it for years. Hasn’t turned out as planned, though.
DougJ
What was the plan?
J. Michael Neal
Not the same thing. The single largest difference is that the use of modeling in finance affects the very system that you are trying to model. As soon as people start to use a model to make trades, the dynamics have changed.
Predicting climate is tough. Predicting market moves is actually impossible.
Fritz
J. Michael — I would think you could factor in the use of the predictive software as one of the factors in your predictive software.
And, Bob, I’m not sure I would characterize this as "adding friction". If anything it removes friction. And anyone who as taken any control theory or designed a feedback loop knows that a bit of resistance can be a very good thing sometimes.
Comrade Jake
Let’s review wingnut logic at work in this thread, shall we?
1) The financial markets have collapsed.
2) Math was used to help predict the markets.
3) Obviously the math did not work.
4) Math is also used in climate models.
5) Clearly anthropogenic global warming is a hoax.
Rush Limbaugh would be proud.
Paddy
Video of Joe The Plumber speaking from Israel, and it’s well worth the money spent. Go Pajamas Media!
Zifnab25
Depends on who is running the machines. If you are a private Corp, your goal is to maximize personal profit even at the expense of your neighbors. In that case, it’s probably not better in the global sense.
However, if the models are for use at large, they could be used to provide the greatest good for the greatest number ( or if you prefer the least harm ) and I consider that a good thing over all.
At the end of the day I am of the opinion that if your options are to know or to not know, ignorance won’t bring bliss. We managed to sink our economy on a grand scale in 1932 and there wasn’t a computer in sight.
You are also assuming a zero net gain. I’m a believer in the whole rising tide carrying all ships thing though. Predict the economy, protect yourself, and you can protect your neighbor ( or client or business partner or employee or the government you pay taxes to ) as well. This seems like a good thing in the global sense.
kommrade reproductive vigor
Hold up. Could someone who has seen this ad provide a synopsis, because from where I sit it sounds like IBM is advertising math.
Adolphus
You what ads I don’t like? The ones with Howie Long dissing on some poor schlubs that they aren’t man enough to drive Chevy trucks. He even insinuates one guy has a manicure.
And yet I watch these half time panels of talking heads and I have never seen so many metro-sexuals in one room in my life. The hair product, the fake mid-winter tans, expensive tailored suits with matching silk ties and hankies, french cuffs, and I know a couple of the older guys have had face work done. I’d bet my bottom dollar there is at least one manicure at the table, too.
If Howie is right and your sartorial and grooming habits can dictate which vehicle you should drive, these dandies should be driving Priuses (Pria? Priai?)
's "TheHatOnMyCat
Yes, not nearly but as well as my Ouija Board.
Just Some Fuckhead
@Adolphus: Howie is actually making fun of the commercials that try to sell you a truck by talking in a badass masculine voice, specifically Toyota and Dodge.
The Moar You Know
@Paddy: That is like watching a five year old trying to fly the Space Shuttle.
TheHatOnMyCat
Words cannot express what a pain in the ass this website is.
"Yes, but not as well as my Oija board" is the comment that belonged in my earlier post. But, I can’t edit it, because, you know, software is too hard. But I know that math can help fix that!
DougJ
I don’t like them either. Howie’s a classy guy in general, so I find these disappointing.
Mike
Other annoying ads:
"Hi, I’m Howie Long, star of ‘Firestorm.’ Did you buy an overpriced truck with all the amenities instead of MY overpriced truck without them? FAG. Did I mention my enormous, inefficient truck gets TWO more miles per gallon than yours? BUY CHEVY! WOOOO! This will surely save the American auto industry!"
Just Some Fuckhead
Oops, wrong thread.
Josh Hueco
@Mike:
Kissing Suzy Kolber covered this back in November with fake dialog from a generic American truck ad. It starts like this:
And it just gets better from there. :) My favorite part:
GuyFromOhio
@DougJ
1. Destroy Democracy.
2. ???????
3. Profit!
Comrade Kevin
@Adolphus:
More like a Miata or a Z3.
TenguPhule
It teaches division and subtraction well enough.
Mentis Fugit
Quoth Zifnab25:
Bernard Madoff convinced a hell of a lot of people he could divide by zero.
Scott H
Run "quants" through a Google News search.
Neue Internetpräsenz
One word on more annoying, at least from a semantic/logic standpoint: drinkability. One more word: 3conomics.
jrg
When people discover an inefficiency in the financial markets, they exploit it, thus removing the inefficiency.
Models of climate systems do not cause the climate to behave in such a radically different way.
rachel
@Zifnab25: IOW: GIGO
Comrade grumpy realist
Speaking as a would-have-been quant (was almost hired by Moody’s to put together CDOs), the whole financial predicting mess is quite simple:
Atoms don’t panic and run into a corner of a box. Humans often do. And when your correlations go to one, your random-walk-hypothesis doesn’t, uh, work.
And don’t blame it on the quants, either, please. They were very good at underlining all the assumptions that were used in coming up with the financial whiz-bang assumed AAA rating. Not their fault if the front office salescritters ripped off the 10 pages of caveats and sent the "bag of dodgy debts" out into the world to be hawked as "AAA safe under no matter what conditions!" to the unsuspecting.
Ash Can
@Neue Internetpräsenz: That one gets me too. I crabbed to the husband about how a claim of "drinkability" isn’t saying a whole hell of a lot for a beer. As opposed to what? Being so bad that it’s UNdrinkable? "Buy our beer. It may be really shitty, but at least you can get it down." The husband explained that the "drinkability" concept in question is referring to the ability to drink a whole bunch of them in one sitting. Great. Frat-boy drinking and shitty beer. A match made in marketing heaven.
Mike G
Math can help predict financial markets.
Math can help an IBM MBA shark tote up his bonus after laying off thousands of Americans and moving yet another division to India where they do crappy coding for cheap.
Math can help laid off IBM employees realize their household budgets are now screwed.