Apologies to the few of you who actually read my blog. I’ve been rather ignoring it lately. Anyway, I came across a youtube video recently that I thought I would post here. I initially saw it here. It might have a bit more hyperbole than I would normally use myself, but I thought it quite compelling.
One of the reasons I found it interesting is that I was recently at a meeting where I met and spoke with another physicist who was working (in academia) as a financial modeller. It was an interesting conversation, but what struck me was that they appeared to think only in terms of the stability of the market. The idea being – I think – is that if the market is stable and optimal, then that is best for the economy. The issue that I could see is that there was no obvious link between the market and the real economy on which it was based. Or rather, there seemed to be nothing in the modelling that essentially said, this market is associated with an economy that ideally should be providing employment, products and services for a particular country. Maybe I’m wrong about this and maybe there are good reason why they do model the markets in this way. It does seem as though, typically, we do ignore many important things when deciding on the value of our markets, which is essentially the case being made in the video below.