This time I´ll share this fascinating video with you. It tells you about programs and mathematical models that are used in Wall Street. Which are more and more used to estimate bankruptcies, share prices and everything they just can. It also tells us a story of those very intelligent people behind those programs.
In the end I would agree with the opinion that there is too much math being used. Human behavior is a foundation that can’t be properly modeled. Our motives, behavior, our actions can’t be modeled mathematically. Problems eventually rise because of this imperfect modelling.
Quants are the math wizards and computer programmers in the engine room of our global financial system who designed the financial products that almost crashed Wall st. The credit crunch has shown how the global financial system has become increasingly dependent on mathematical models trying to quantify human (economic) behaviour. Now the quants are at the heart of yet another technological revolution in finance: trading at the speed of light.
What are the risks of treating the economy and its markets as a complex machine? Will we be able to keep control of this model-based financial system, or have we created a monster?
A story about greed, fear and randomness from the insides of Wall Street.
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Inflation is taxation without legislation. ~Milton Friedman