Via this excellent Slate piece on the ethics of big data and machine learning (at the top of my mind after watching a DWP presentation on their forays into the field), there's this article by an ex-finance-worker-now-professor. Three lovely bits. First, their modeller's Hippocratic oath:
This seems especially relevant at the moment as I'm finishing off something I know only tells a partial story, but I also know may be used by some people with an axe to grind. I'm not quite sure what's going to happen yet. Hopefully nothing.
Derman also says:
Unfortunately, no matter what academics, economists, or banks tell you, there is no truly reliable financial science beneath financial engineering. By using variables such as volatility and liquidity that are crude but quantitative proxies for complex human behaviors, financial models attempt to describe the ripples on a vast and ill-understood sea of ephemeral human passions. Such models are roughly reliable only as long as the sea stays calm. When it does not, when crowds panic, anything can happen.
This reminded me of Scott's forest parable: in this case, if the sea doesn't stay calm, perhaps there are ways of calming the sea rather than admitting the model might not be up to scratch. When does the model make the world?
Lastly, Derman quotes Edward Lucas:
If you believe that capitalism is a system in which money matters more than freedom, you are doomed when people who don’t believe in freedom attack using money.
Trump's Nevada win made this seem prescient. A man whose only real distinction is to be very, very wealthy (perhaps despite, rather than because of, his own efforts) ... well, we'll see. This year could end up pretty terrifying.
New year's earnestness 5/17. Nearing the end Feb?? Uh oh!