[-empyre-] empyre Digest, Vol 51, Issue 21: Gamma Rays

naxsmash naxsmash at mac.com
Wed Feb 25 14:48:39 EST 2009

So interesting, yes, indeed the same affliction occurred on Wall  
Street, that a correlation calculation could be presumed to be real,  
and of course
the converse, at the same time, that the real didn't matter. (see:  
George Bush on realism).

there's a Wired Magazine article on this very point.  A formula of  
correlations produces a fiction about risk.


"In the world of finance, too many quants see only the numbers before  
them and forget about the concrete reality the figures are supposed to  
represent. They think they can model just a few years' worth of data  
and come up with probabilities for things that may happen only once  
every 10,000 years. Then people invest on the basis of those  
probabilities, without stopping to wonder whether the numbers make any  
sense at all.

As Li himself said of his own model: "The most dangerous part is when  
people believe everything coming out of it."

— Felix Salmon (felix at felixsalmon.com) writes the Market Movers  
financial blog at Portfolio.com.

On Feb 24, 2009, at 5:17 PM, John Haber wrote:

> Thanks!  (Oh, dear, it's so long since I've been in Paris that I've  
> no idea.  If Laurent is still editing posts here, he'd know.)
> One thing that interested me about the handout was its confidence in  
> the analogy.  It's easy to forget that, when it comes down to it,  
> anything is analogous to anything.  The analogy is itself a  
> creation, an illumination, an insight.  That's important in  
> appreciating art and metaphor, but it's a natural mistake for  
> artists to make for at least two reasons.  One is that they care  
> about and believe in what they do.  But the other, often quite  
> conversely in ideology, is the presumption of realism, whether  
> mediated by representation or not.  (I've argued that new media is  
> especially susceptible to this, now that we're used to "real time  
> data" and now that other genres have waned in presumed realism and  
> dominance.)
> John
> _______________________________________________
> empyre forum
> empyre at lists.cofa.unsw.edu.au
> http://www.subtle.net/empyre

naxsmash at mac.com

christina mcphee


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