How Wall Street Lied to Its Computers – Bits Blog – NYTimes.com

How Wall Street Lied to Its Computers – Bits Blog – NYTimes.com

Yes, I promised not to comment on new stories, but this one seemed good enough (and obscure enough) to make an exception.  This blogpost from the NYT talks about many of the same issues we discussed in class last week – garbage in, garbage out.  It talks about how analyists put optimistic and incomplete data into their computer models which yielded (you guessed it) optimistic and incomplete forecasts.  No matter how fast we crunch the data, what we can learn from it is only as good as the quality of that data and the assumptions we make about it.  Computers can give false hope and reassuring predictions, when that’s what their owners have trained them to do.