Mathematicians caused the current crisis

[Havet]

ed2FWNWwE3I

...or did they?

Very interesting documentary on the rise (and fall?) of economic/financial models

(SHORT VERSION): For example, if a beer costs 1 dollar, in the real world, 100 beers will never cost 100 dollars, due to discounts or scarcity. And current financial models are based on linearity (100 dolars for 100 beers) instead of non-linearity.

[NKVD]

ed2FWNWwE3I

...or did they?

Very interesting documentary on the rise (and fall?) of economic/financial models

(SHORT VERSION): For example, if a beer costs 1 dollar, in the real world, 100 beers will never cost 100 dollars, due to discounts or scarcity. And current financial models are based on linearity (100 dolars for 100 beers) instead of non-linearity.

To call these people mathematicians is just unfair. Real mathematicians use their tenure to solve abstract theorems, not develop quantitative models and try to make money.

[Havet]

To call these people mathematicians is just unfair. Real mathematicians use their tenure to solve abstract theorems, not develop quantitative models and try to make money.

A mathematician is a person whose primary area study is the field of mathematics. Whether they make money out of it or not is irrelevant. Thus, the concept of "fairness" doesn't apply here.

[Ele'ill]

I just watched the whole thing- good video but I don't think I really have an opinion on the specifics. I think that video but as a short series following the mysteries guy and the three Quants that are now presumably retired from it would be fascinating.

The blackbox and airline fiasco was amusing.


It's amazing how increasingly possible it could be to cause a global crash using keyword searches and presenting fresh articles containing fake or old data.

[NKVD]

A mathematician is a person whose primary area study is the field of mathematics. Whether they make money out of it or not is irrelevant. Thus, the concept of "fairness" doesn't apply here.

But that field of study is not real mathematics. It's actuarial science.

[Kotze]

Well that was shit. It's all slow-mo fuckface close-ups to music that tells you this guy is serious and there are rotating graphics that make sounds for no particular reason and don't explain a thing.

There's of course the obligatory bit where something bad today is compared nostalgically to a past that never was (blahblah banks are supposed to do good, but now there are nerds and computers and everything is crazy, let's forget the 1929 crash). What is the intended message here? Am I supposed to think that high-speed trading has something to do with the last fuckup? Market bubbles exist for months, even years, so what does this have to do with it? They don't talk about how it comes that land markets are particularly bubble-prone and how that could be fixed.

But I have to admit that it was new information to me when the mysterious anonymous insider narrator man told me in his slimey rapist voice that math is the first language of Asians (36:44). :rolleyes:

[RGacky3]

THey did'nt cause the crash the perverse insentive system of capital markets did, they just created tools to help that crash along. To blame it on the quants ignores the whole reason there were quants in the first place, and what their role was, it was massiave profits for financial companies.

Its kind of like blaiming commanders for the horrors of war, no, you blame the politicians that send them there and the idea of imperialism.

[Havet]

Its kind of like blaiming commanders for the horrors of war, no, you blame the politicians that send them there and the idea of imperialism.

In the end, its the soldiers that cause the horrors, not the politicians or commanders. The soldiers have the choice to participate or not (unless there is a draft, but even so they can choose political exile)

[RGacky3]

of coarse and I'm not saying they did'nt have a part in it, what I'm saying is blaiming them is counter productive, they arnt the ultimate cause, the system is.

[Thirsty Crow]

In the end, its the soldiers that cause the horrors, not the politicians or commanders. The soldiers have the choice to participate or not (unless there is a draft, but even so they can choose political exile)
Political exile, you say?
That depends on concrete circumstances, or in other words: it is reasonable to assume that in some cases there is no possibility of political exile, which makes your argument bankrupt.

[ComradeMan]

of coarse and I'm not saying they did'nt have a part in it, what I'm saying is blaiming them is counter productive, they arnt the ultimate cause, the system is.

One of Che's favourite poems, I am sure you can find a translation online so I'll leave it in Spanish:

NO SÉ POR QUÉ PIENSAS TÚ


No sé por qué piensas tú,
soldado, que te odio yo,
si somos la misma cosa
yo,
tú.
Tú eres pobre, lo soy yo;
soy de abajo, lo eres tú;
¿de dónde has sacado tú,
soldado, que te odio yo?
Me duele que a veces tú
te olvides de quién soy yo;
caramba, si yo soy tú,
lo mismo que tú eres yo.
Pero no por eso yo
he de malquererte, tú;
si somos la misma cosa,
yo,
tú,
no sé por qué piensas tú,
soldado, que te odio yo. Ya nos veremos yo y tú,
juntos en la misma calle,
hombro con hombro, tú y yo,
sin odios ni yo ni tú,
pero sabiendo tú y yo,
a dónde vamos yo y tú...
¡no sé por qué piensas tú,
soldado, que te odio yo!

Nicolás Guillén, 1937

[Amphictyonis]

In the end, its the soldiers that cause the horrors, not the politicians or commanders. The soldiers have the choice to participate or not (unless there is a draft, but even so they can choose political exile)

Capitalism caused the crisis.

[ComradeMan]

In the end, its the soldiers that cause the horrors, not the politicians or commanders. The soldiers have the choice to participate or not (unless there is a draft, but even so they can choose political exile)

That argument is idiotic. You are thus a soldier for capitalism every time you voluntarily buy a burger, fill up your car or buy a new lawnmower.

[Havet]

Political exile, you say?
That depends on concrete circumstances, or in other words: it is reasonable to assume that in some cases there is no possibility of political exile, which makes your argument bankrupt.

It is also reasonable to assume that in most cases there is a possibility of political exile.

See what I did here? Claimed the opposite, just like you did. How wonderful it is to have opinions!

[Havet]

That argument is idiotic. You are thus a soldier for capitalism every time you voluntarily buy a burger, fill up your car or buy a new lawnmower.

We were discussing humanitarian wars, not political or social ones.

[Obs]

humanitarian wars
what.

[ComradeMan]

We were discussing humanitarian wars, not political or social ones.

Thank you Von Clausewitz.

Wars are economics by other means.

WTF is a humanitarian war?

[Ele'ill]

Wars are economics by other means.




You can also wage war without a military- which would be economic warfare.

[Havet]

WTF is a humanitarian war?

A fancy way of saying what we all mean as war: soldiers with guns and explosions. This is in contrast with other wars: clan wars, class wars, economic wars, hacker wars, etc

[ComradeMan]

A fancy way of saying what we all mean as war: soldiers with guns and explosions. This is in contrast with other wars: clan wars, class wars, economic wars, hacker wars, etc

You know nothing of war.

The war with guns and explosions classically only represents 1/9th of actual warfare.

You are confusing battles with warfare.

[Revolution starts with U]

Battles BC is a pretty good show :thumbup:

[RGacky3]

Battles BC is a pretty good show

Its a crap show, trying to take 300 aesthetics and applying them in the most cheesy way possible.

But either way, the Quants were not the cuase of the crash if it was'nt for them the crash wuld have happened anyway because of the perverse incentive structure.

[Havet]

ComradeMan, lets forget about that side issue which is starting to (if not already) derail the thread, lets focus on the main point here: quants. Now...



But either way, the Quants were not the cuase of the crash if it was'nt for them the crash wuld have happened anyway because of the perverse incentive structure.

Well, for that claim to be true you need to prove the following:
1-Examples of bubble-based crisis with similar magnitude without quants also exist
2-The hypothetical subprime crisis would have had the same impact without quants

Now, for it to be perfectly clear to everyone, Im not really supporting the statement that "mathematicians caused the crisis". I am throwing around arguments and see what you make of them, and only after will I make my mind about the issue. I didn't come here with an ideological blanket of any kind in which i can crawl back to if i feel 'endangered'

[Thirsty Crow]

It is also reasonable to assume that in most cases there is a possibility of political exile.

See what I did here? Claimed the opposite, just like you did. How wonderful it is to have opinions!
But your entire argument is invalid if there is only one case where there is no possibility of political exile. It should be clear to you how flawed it is precisely because of this reasonable assumption that there may be concrete circumstances which prevent the realization of the abstract possibility of political exile.
Now, what would an intellectually honest person do is the following: modify the argument in order to account for the complexity of concrete conditions (something which your simplification fails to do). That would effectively mean that you should abandon your insistence that it is the soldiers who are responsible for the horrors.

[RGacky3]

Well, for that claim to be true you need to prove the following:
1-Examples of bubble-based crisis with similar magnitude without quants also exist
2-The hypothetical subprime crisis would have had the same impact without quants

Now, for it to be perfectly clear to everyone, Im not really supporting the statement that "mathematicians caused the crisis". I am throwing around arguments and see what you make of them, and only after will I make my mind about the issue. I didn't come here with an ideological blanket of any kind in which i can crawl back to if i feel 'endangered'

I don't believe those 2 points, its like saying are wars worse with or without bombs? They are worse WITH bombs, but that does'nt mean you can blame the bombs for war.

[Havet]

But your entire argument is invalid if there is only one case where there is no possibility of political exile.

How so?


I don't believe those 2 points, its like saying are wars worse with or without bombs? They are worse WITH bombs, but that does'nt mean you can blame the bombs for war.

I apologize for not being clear enough. I don't think mathematicians can actually be blamed for the entirety of the crisis, which means, they cannot be held responsible for all the crisis nor for its creation. But I do think there is room for argument in the fact that they may have increased the effects of the crisis.

And I say 'may' because I would need a math degree just in order to understand a small portion of their work in order to argue this point. For the moment I have no way of telling. But we do know some facts (which are mentioned in the video). One of them is that most quantitative analysis practitioners base themselves in linear mathematics. We know linearity is very useful for exercises and abstract problem-solving, but at the point when people's lives are directly dependent on linearity then we have a problem, because then the math is farther away from reality.

[RGacky3]

But I do think there is room for argument in the fact that they may have increased the effects of the crisis.


Of coarse, just because they were able to maximise the money involved, and they gave legitimacy to the bets.