Saturday, December 31, 2011

Posts of interest - 2011

As a means (an attempt) to freeze a point in time (which we know is not possible), the last post of 2011 will list the top four posts in terms of having been read (well, views, anyway). Perhaps, this will be a yearly event.

Aside: As said in Mission and Method, posts are to contribute to a theme, though there may be divergent ones from time to time. Blogs allow categories, but these are problematic since they collect and present in a time order. From time to time, there ought to be a super-post that gives a more coherent view (here is an example - Truth, Fiction, and Finance). Perhaps, that type of thing will be done more often in the coming year.

Posts of interest, as of today:
  • -- Wing and body -- This is from mid-2009; at the time, a lot was unknown by the lookers. Of course, the Company did make the right decisions to work things as needed, because the test period continued. Too, there have been deliveries. Now, the issue is production. But, the topic of this post was proven by tests. Will we know the lessons learned? I just hope that one of them is to not 'believe' computational modeling, by itself despite what has seemed to be sufficient evidence that we can do so. As an aside, a whole lot of testing has been pushed out to the users, in a seemingly production environment. Even, with cars we find this. Usually, this failure has little consequences beyond grief. As we saw with the airplane, the rigors cannot be avoided.   
  • -- Confoundedness -- Again, mid-2009. One player is gone. In the look backs, what will be seen as lessons learned? It remains the case that measured steps from a known position is the right thing to do in many cases. However, there are many other times when going further is warranted. Again, this is a balance that we need to learn more about. 
  • -- Truth,fiction and finance -- From 2008, this post pulls together somethings about the idiots of finance. Why do I say that they're idiots? They 'believe' too much in computation; the main issue is that this belief was reinforced due to machinations that allowed big paybacks (without clawbacks). The real issue is that these are not trivial things that are easily resolved. And, the current state of evolution in these matters is so apparent in its unfolding over the past years; yet, forces whose sole purpose is obfuscation seem to have the ear of the politicos. Oh yes, money is what drives that whole thing. 
  • -- Cramming for the exam -- From 2007, the thing was motivated by a CEO's off-handed remarks that must have made engineers cringe. Yet, his was the mouth that perturbed the airways. As the first bullet says, from two years later, the proof is in the pudding. So, there was eventual performance. But, that came about from applying expertise, money, and thoughtful reviews and not from hubris associated with word play. 

12/29/2012 -- Summary - 2012.

Modified: 12/29/2012

Monday, December 5, 2011

December, 2007

The blog started with a project management focus. By the end of 2007 and the next year, it seemed that finance had really gone down the drain. Why? Too much gaming and misuse of mathematics (all because of an environment that relaxed oversight and that allowed young ones to play games without constraint as long as it filled the pockets of those who were funding the game -- at the same time, the real engineers had followed their improvements with an increasing amount of power at a reduced cost).

We had people thinking that trashy stuff, like the tranche, was high-powered finance. Wishful thinking, in some cases. Definitely, unrealistic in scope (there is no perpetual motion machine (something from nothing -- Ben, Ben, you can't just keep printing money -- oh, you're developing an economy to be like a game board -- funny money), yet there are many ways for people to gather more than they deserve).


Then, there was this role that had been created in which a wizard had a couple of buttons to control the economy via monetary schemes. Back in 2007, we had not realized how far he could take it in applying changes, and schemes, without any real data with which to know the impacts.

So far, does he look like gold? We don't have the final accounting; in other words, it's too early.


We jawboned a lot about moral hazards. It seemed that the FED was rewarding this a lot in its prancing upon the world's stage. Is that not still the case? Later, it was obvious that Ben liked to dance around strewing his fairy dust.

Too, the FED made happy talk.


The whole structure was shaky due to an overabundance of leverage. This was one consequence of the bastardized mathematics mentioned earlier. In fact, much of the machinations of financial engineering would not have been possible without the advances in computational modeling (this I know about deeply).


So, it's been four years of major oops, with all sorts of people suffering. Of course, the system risk is still there and understated. We can look back and try to see what happened. That will happen in the academic environment.

In the meantime, people are trying to move forward. As the OWS shows, we cannot sustain ourselves using the methods that led to the failure. What would help improve things? Do we not need to reconsider the deleterious effects of colonization and exploitation, for one thing?


12/07/2011 -- Jim Rogers sees saver sacking, too.

12/06/2011 -- Congress wants to clean up its act.

Modified: 12/07/2011