limitations of financial algorithms pdf


  1. Cameron says:

    Great post. You know there is a lot marketing hype surrounding AI. I keep telling people it’s just a glorified analytics and besides as you point out garbage in garbage out.

    You write “The profit motive is the driver of capital. It cannot be ignored and when it is, it comes around with doubled force. At the beginning of year the projection was for a rebound in profits in the second half of the year. ”
    Indeed the current pace of downward revisions to estimates has only been exceeded during the recessions of 2001 and 2008-09. Earnings do matter as gravity does or else it is not capitalism.
    Earnings outlook is tracking the manufacturing PMI slump.

    When it comes to employment data, the unemployment rate is the most lagging indicator of future economic activity. In other words, higher unemployment follows recession not the other way around. Some point out low unemployment as the reason that there is no recession but I disagree. There is a lag between fall in mass and rate of profit and layoffs.

    • You make good points all round. Keep your eye on aggregate weekly hours worked by non-supervisory workers as these have been falling over the last six months. Best of the bad labour statistics.

  2. Pingback: THE MARCH OF THE FINANCIAL ALGORITHMS — Brian Green | theplanningmotivedotcom | Taking Sides

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