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The thought that politicians are not smarter than me is so scary to me. I don't fully understand so many things (globalization is absurdly complicated), but at
by Gasp0de 4y ago
The thought that politicians are not smarter than me is so scary to me. I don't fully understand so many things (globalization is absurdly complicated), but at least I don't have to make decisions that will affect millions of people.
- RajT88 4y agoI don't think anyone really fully understands the global economy. A friend of mine who is a financial engineer by trade (has designed the algos for HFT, works at Blackrock, etc.), explained a few basic principles to me: 1. All models are wrong; some are useful. A good way of making predictions is to average together the most successful models. 2. Economic systems are run by humans, who are constantly trying to game the system to their advantage. As greater capabilities for measuring and understanding the system are developed, the dynamics of the system are changed by those capabilities, thus changing the understanding of those metrics in the first place, and on and on, forever. 3. The way markets react to developments in technology is of course why you can't trust anyone who is promising huge investment returns based on "backtesting". Nobody can predict the future, because the way the market reacts to changes is constantly evolving. At best, we can understand the dynamics of the global or local economies at a given point in time. Even that is extremely difficult.