Slashdot Mirror
Computer Models and the Global Economic Crash
Anti-Globalism passes along a review in Ars of some recent speculation on the role of interconnected computer models in the global economic crash. "If Ritholtz, Taleb, Mandelbrot, and the rest of the computer modeling and financial engineering naysayers are correct about the big picture, then we really are arguably in the midst a bona fide computer crash. Not an individual computer crash, of course, but a computer crash in the sense of Sun Microsystems' erstwhile marketing slogan, 'the network is the computer.' That is, we have all of these machines in different sectors of the economy, and we've networked all of them together either directly (via an actual network) or indirectly (by using the collective 'output' of machines in one sector as input for the machines in another sector), and like any other computer system the whole thing hums along nicely... up until the point when it doesn't."
Funny how all the computers seem to be working properly when the prices are going down, but not working half the time when prices need to go back up.
I guess it's like how gas pumps will correctly increase the price of gas when the price per barrel of oil goes up, but are buggy and won't reduce the price later when the costs come back down.
It all goes back to the "invisible fist" of the free market...
...Bernie Madoff assures me that my portfolio is safe and I shouldn't worry.
Have gnu, will travel.