Slashdot Mirror
World Cup Prediction Failures
pdcull writes "We all read on Slashdot about the investment banks using their massive computer power and clever modeling techniques to predict the FIFA World Cup outcome. Now that Goldman Sachs's, UBS's and Danske Bank's favorite, Brazil, has been eliminated, and with JP Morgan's England long gone, the question that begs to be asked is: can we really trust these guys to predict the financial markets any better than they did World Cup?"
Surely the last couple of years are evidence enough that the financial industry can't predict or manage the markets? We didn't need football to tell us this :D
The problem with slashdot is that most of its users were bullied and stuffed into lockers as kids!
Your question is, "Hey, these guys who spend their entire lives predicting financial markets aren't good at predicting sports. How can we trust them to predict financial markets?"
"Goldman has published an exhaustive list of defences against the allegations that it acted illegally when it allowed hedge fund Paulson & Co to choose some of the sub-prime backed securities to be included in a product it sold to investors even though it knew the hedge fund was betting against them."
The financial giants don't predict the markets, they make them.
A better analogy would be if Goldman Sachs was allowed to pick the players for each team, and put all the worst players into Brazil. Then sell all their customers bets for Brazil to win while simultaneously betting against them.
By having superfast computers on the floor and looking at the orders coming in, they buy and sell just before the orders execute.
This would be like observing a goal was clearly going to occur (or not occur) and then betting a goal would occur (or not occur) in the milliseconds before the goal actually occured.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Ha! Or they had some accounting practices that they didn't want the government looking at with a fine tooth comb. The truth is, none of us will really know for certain what the real story is. Just because the guy's a friend from college doesn't mean you know the whole story. Could be true, could be 20% hedging, could be 100% pack of lies. Don't know, and neither do you.
You forgot that in the end they crash the car into A, B and the rest of the alphabet. And that the alphabet then buys them a new car - despite the fact that quite a few car makers were killed in that crash too.