3 ms·

They're just now doing this?

• create_account 19y ago
  It's a story of how the mortgage industry took to computer models over time (and how they were abused in the subprime mess).
  • apathy 19y ago
    It's more than that, though -- if you look at this in the context of generic data projection and 'intelligence amplification' software, some (perhaps positive) aspects of the subprime boom were logical outgrowths of more powerful tools for reviewing borrower credit histories. And some of the hugely negative aspects of the subprime mortgage market (and resulting credit crunch) were logical outcomes of Wall Street's insane greed, coupled with derivative financial instruments that allowed risk to be packaged as CDOs without due diligence or oversight. Give Wall Street a loophole (hell, give any poorly regulated industry a loophole) and the outcome is predictable. Couple the loophole with automated tools that allow irresponsible people to conduct transactions in the blink of an eye -- an unsupervised ML project, as it were, with an algorithm appropriate only for supervised learning -- and you get a massive financial shockwave... This is not entirely different from the computer-trading aspects of Black Friday, but due to the lax oversight of the fundamentals, it will likely have much longer-lasting aftershocks. It's unclear whether our next president will have the character to fix the underlying problems, but as usual, the tools have no morals -- it is only their users. And I've never seen any indication that a moral being can survive on Wall Street, at least not en masse.
• apathy 19y ago
  please RTFA before commenting; it's a good article and the creator of the software contributes a particularly arch comment at the end. Automated unstructured information processing is the wave of the future, and it always will be ;-) (as used to be said of parallel computing, and perhaps still should be)
  • deleted 19y ago
    [deleted]