EICKnotes for Apr 08, 2014

Links to stuff that caught my eye today:

The high frequency finance debate continues and one of the best informational pieces I've read comes from Zero Hedge. Most interesting are two graphics, one showing a listing of HFT strategies and the other a flow chart of the difference between the old trading process and the new.

HFT Trading Strategies

Trading Process Before HFT:

Trading Process Before HFT

Trading Process After HFT:

Trading Process After HFT

Interesting article in the NYTimes about virtual reality. The technology is progressing very fast and with Facebook's resources with the purchase of Occulus should speed up adoption. I thought this quote on adoption of VR was insightful:

As Dr. Bailenson pointed out in "Infinite Reality", a book he co-wrote about the future of VR, humans are an escapist lot. From books to movies to video games to iPads, whenever technology has presented us with ways to jettison our worries and slip into worlds of our own making, we've jumped at the chance. If the tech is good enough, virtual reality will be no different.

While it's not as good as the two shows that sandwich it on Sunday's HBO, Silicon Valley is worth trying out. WSJ has a good review and HBO put the whole first episode on youtube.

Big data is a wonderful tool and can be used to illuminate many very difficult problems but it isn't perfect. NYTimes with nine problems facing big data analytics.

  1. Correlation doesn't equal causation.
  2. Big data can work well as an adjunct to scientific inquiry but rarely succeeds as a wholesale replacement.
  3. Many tools that are based on big data can be easily gamed.
  4. Even when the results of a big data analysis aren't intentionally gamed, they often turn out to be less robust than they initially seem.
  5. The echo-chamber effect, which also stems from the fact that much of big data comes from the web. Whenever the source of information for a big data analysis is itself a product of big data, opportunities for vicious cycles abound.
  6. The risk of too many correlations.
  7. Big data is prone to giving scientific-sounding solutions to hopelessly imprecise questions.
  8. Big data is at its best when analyzing things that are extremely common, but often falls short when analyzing things that are less common.
  9. The Hype

Twenty years ago today the horrible genocide in Rwanda began. Project Syndicate has a remembrance by the Minister of Foreign Affairs and FP has one from a former aid worker. Rwanda today is a wonderful, clean and peaceful country. It's amazing how far they have come in 20 years.

The best of the rest

  • The Daily Routines of Geniuses (HBR)
  • Tales From the Millennial's Sexual Revolution (Rolling Stone)
  • Errol Morris on Rumsfeld, the truth and "The Unknown Unknown" (Salon)
  • The Surprisingly Large Cost of Telling Small Lies (NYT)
  • Here's why a China housing crash would crush the middle class and why that matters (Quartz)
  • New York storefronts: what a difference a decade makes (Guardian)

By Jon Eickmeier | April 7, 2014 | links curated markets economics EICKnotes

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