06 December 2012

Green Grow the Rushes

There's been a bit of angst on display through R-bloggers. First one Matt Asher showed his simple analysis, "disproving" global warming. Lots of comments, mostly disagreeing.

Then, Ian posted an explicit rebuttal. More comments, generally agreeing with Ian.

I confess, I commented a bit. I just returned from looking at the comment streams, still ongoing, and just have to share a bit of one of them (from one dhogaza, no link):
CO2 forcing is real. If you think you can disprove this basic physical fact with statistical analysis, I invite you to stare into the business end of a CO2 laser, hit the "on" switch, and report back afterwards ...


This all is relevant, beyond peeing on the global warming folks, due to the quants' penchant for ignoring physical reality, and assuming they can simulate a truer reality (they don't always say it so bluntly, but that's what they mean). These quants crashed the global economy be the simplistic assumption that the data describing the US housing markets for a short period of time would be true for all time going forward. They ignored the historic record of the ratio of house price to median income. They ignored the divergence of this metric as it happened. They ignored the process (fiddling by mortgage companies, and thence in competitive response, banks) which propelled the divergence. Their Monte Carlo models told them they were right. Sure.

Ignorance is bliss. If you've scarfed up all the money already.

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