Wall Street used complex computer algorithms that were supposed to finely tune the functioning of financial markets. Remember how all of that leveraging was okay, because the big financial houses had all those mathematical formulas working for them? Well, that didn’t work out so well.
And now as Wired points out, algorithms didn’t do any better for the Pentagon in predicting the outbreak of unrest in Egypt. The Pentagon has spent more than $125 million on computer models that are suposed to forecast political unrest. Didn’t work. ”All of our models are bad, some are less bad than others,” Wired quotes Mark Abdollahian, who has “built dozens of predictive models for government agencies,” as saying. Bravo to Mr. Abdollahian for his honesty.