The Rise of the (Financial) Machines

BartlebyScrivener writes "A New York Times Op-Ed quoting Freeman and George Dyson wonders if Wall Street geeks and 'quants' outsmarted themselves with computer algorithms to create the current financial debacle: 'Somehow the genius quants — the best and brightest geeks Wall Street firms could buy — fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and — poof! — created $62 trillion in imaginary wealth. It's not much of a stretch to imagine that all of that imaginary wealth is locked up somewhere inside the computers, and that we humans, led by the silverback males of the financial world, Ben Bernanke and Henry Paulson, are frantically beseeching the monolith for answers.'" The quoted essay from George Dyson is available at Edge.

Comments

This is business, only regulation will do that!

[plasmacutter]

. Only one wing of the building fell off that time. If we had exercised any prudence whatsoever we would have taken the hint.

It's the job of business to make money, and damn morals, prudence, or anything else which might get in the way.

This is what we call "moral hazard". This is the REASON why we have regulation, and why reaganomics was declared a failure decades ago.

Still, these moronic, bull-headed politicians and their faux-news commentators (i'm looking at you bill) keep pushing it.

Self-regulation is no regulation.