I stand by what I said. Economic models are so complicated and include so many factors that it is impossible to predict what happens tomorrow. Most of the economists have agendas that they hardly bother to hide.

Economists are great at telling you why the events of yesterday occurred. Pretty useless at predicting the future.

Might point out I am an economist. Or trained as one anyway. I also built financial risk systems for banks.

Do you think we'd be better off without those systems?

I don't consider myself to be earning large amounts of money and I don't recall stating that either. Most engineers who I place into work are earning 50% more than I do. I do however live comfortably, mainly because I don't spend recklessly.

I fully understand that other people have different experiences, but I was referring to the OP about 'Oz Falling from high'. From what I have seen, it really isn't.

I may not have experienced a downturn in the economy, Australian-style, but I have had the displeasure of being through two in the UK. Australia is a million miles away from the situation in the UK, or Spain, or Greece, or Ireland, or Portugal, etc.

Cheer up everyone!

Lyndon LaRouche did but nodody listened to him.

That’s a touchy subject with me. When I completed one I got in trouble for telling the bank that I didn’t think it showed them any more of their exposure than they knew before, and they would do better to change processes to make the bank more risk averse. Didn’t go down well.

One of the big dangers of electronic risk systems is that they are based upon empirical data, usually via observation of hetroskedasticity. That’s fine as long as the event of the future has occurred in the past, which is seldom the case.

Personally, paying bank staff bonuses based upon trade, without inclusion of risk or personal financial involvement in the risk, is fatal.

In answer to your question, in my opinion better selection and more reasoned motivation of bank staff would be a better solution than using predictive analytics.

That's actually a different and better answer than I was expecting. Fair play to you. I guess I would find it hard to disagree with that. Rather than try to predict the future, don't over expose yourself.

I was going to argue that if there are merits to these systems then perhaps there are merits to looking forward.

If most of the engineers you place earn 50% more than you do, then it still means that you are on a good income. It is not always possible to live comfortably, even if recklessness is avoided. Health and education costs can always bowl you over, but there are huge individual experiences of those costs.

I have experienced recessions in the UK and Australia. What does everyone think are the best characteristics for weathering bad times: the "no worries" optimist type or the "it will be bad" pessimist type?

Isn't there a happy medium? I think optimists tend to overexpose themselves, pessimists tend to be defeatist and say "what's the point".

As with most things in life, somewhere in the middle.

+1

Guessing you didn't build any for Irish or Greek banks, or if you did, you certainly wouldn't be admitting it....LOL !!!

When one part of the economy is performing badly, another is performing well.

More billionaires were created during the GFC than ever before in history.

If you think about it, money is never 'lost', it's just transferred to someone else

Exactly. The trick is to be one of the people who it's transferred to.

From my understanding it was never there in the first place... or a huge chunk of it.. and this crisis is the end result of that scenario.