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Did Mathematical Models Cause the 2009 Financial Crisis?

In the work of finance, there exist in every company a group of workers who are commonly referred to as "quants". Formally, they're known as quantitative analysts and there job is essentially to crunch numbers; using the tools of mathematics, they analyze statistics and numbers and create and evaluate financial models.  The value of math cannot be overstated; from physics to science to engineering to politics to business and finance, the tools of math often form the bedrock of these disciplines. However, its adamant use by financial analysts on Wall Street has always been scrutinized and that has especially been the case since the financial collapse that struck much of the Western World 5 years ago.  Warren Buffet, the famous billionaire and investor, even crudely asked people to "Beware of geeks…bearing formulas".  This wasn't just the ramblings of a disgruntled old man; there was a general sentiment that quants had gone too far with their models. Th...

Uncertainty Principle & the Non-Commutative Property

http://en.wikipedia.org/wiki/Commutative_property Scroll down for relevant discussion on the uncertainty principle. Understanding the mathematics behind the physics involved is imperative to really understanding Heisenberg's Uncertainty Principle. We've already discussed the logic behind it and the physical consequences, but now it's time to really get down to the fundamentals. We're going to look at something we tend to take for granted in our daily interactions with math: the commutative property of mathematics. The commutative property in math applies to addition and multiplication. It basically states that, when combining two "elements" (i.e. numbers), the order does NOT matter. This is demonstrated in the following diagram: It doesn't matter whether the blue or orange dots are counted first - same result But we've always known this stuff, right? I mean, everybody knows that 2+3 is the same as 3+2 (at least I hope)! The same rules fly ...

Why Don't Electrons Just Crash Into the Nucleus?

Here's a question that may have come to your mind in the past: why don't electrons just crash into the nucleus?  Of course, we've been taught (since middle school science!) that electrons orbit the nucleus just because. However, they also teach us that opposite charges attract. Seeing that electrons are negatively charged and protons are positively charged, we have to question how the electron is able to maintain its orbit. Why doesn't it get slowly drawn towards the positive nucleus?  A common (and incorrect!) explanation is that it is the speed of the electrons that keep them from flying toward the nucleus. In other words, the electrons are zooming around so fast, that they are able to overcome the attractive force. This idea is similar to spinning keys on a string; even though the string is pulling the keys towards your hand, the speed of the keys keep it moving in a circle.  This explanation would be just dandy if not for the fact that, if you were ...

In Honor of Mozart: A Brief Look at a Genius

It has been 223 years to the day that Wolfgang Amadeus Mozart passed away (please take a moment to appreciate how badass a name like Wolfgang is). At the age of just 35, arguably the greatest composer of all time succumbed to illness on December 5th, 1791. Even in the brief 3 decades that he was active, Mozart - a child prodigy in every sense of the title - was ridiculously productive. The man was literally making sophisticated adults look foolish from the comfort of his diaper. Starting at the age of just 7, he was able to pen masterpieces that have lived on in their influence and sheer beauty even to this day. Here's a look at some of my favourite pieces from Mozart:  Requiem  A lovely piece by Mozart, the screech of the violin at 0:52 is one of the most heavenly yet bone chilling sounds I've ever heard produced.  Marriage of Figaro  This one holds the upbeat pace that I always loved in Mozart's work.  Symphony No. 40 - 1st Movement...

3 Awesome & Inpirational Russian Monuments

Though the USSR certainly had its problems over the Cold War era, if there's one thing there government was very effective at, it is making memorable monuments. Recently, I've come across some very impressive (some, even touching) monuments that have been erected in Russia over the years. 3. Monument to the Conquerors of Space  Created in 1964, this monument calls Moscow its home. Made of pure titanium and standing at a whopping 360 feet in height (!), this monument's propose is to commemorate the achievements of Russian exploration. Though they may have been outshone by the United States in the space race of the 1960s, the Russians have plenty to be proud. Hopefully, Russia can once again return to a nation focused on science and discovery in the near future.  2. The Lab Mouse Monument  This is perhaps my favourite monument. It currently stands outside the Institute of Cytology and Genetics, in Russia and was made to pay respects to the many mice who...

Was Mathematics Discovered or Invented? A Look at the Proposed Fundamental Truth Behind Mathematics

The distinctions between discovery ad invention is often clear in the sciences. In physics for instance, it is well understood that experimental observations, measurements and laws are "discovered" and the theories that help model the phenomena at hand are "invented". But what it was one to say about math? The field of mathematics is not inherently empirical in nature - are mathematical breakthroughs discovered or invented? The Implications of Each Side  Before we delve into both sides of the argument, we should probably clear something out: the consensus seems to be that when one refers to the phrase "discovered", they are implying that the universe is, at a fundamental level, mathematical in nature…which sounds like nonsense, right? Well, it's really a well defined idea; the implication is that mathematical structures and logic is an aspect of the universe and NOT just a human construction. In other words, math wold exist even if humans wer...

Reflections on a Disappointing Remembrance Day

Let me start by qualifying what I'm about to say: I am not in any way opposed to the idea of Remembrance Day. In fact, I believe in the value of acknowledging our history and paying respect to the brave women and men, along with their loved ones, who lost their livelihood in past wars. With this being said however, I am not always (and to be frank, feel no obligation to be) a fan of the presentation of Remembrance Day. While the notion of the event is noble in principle, the messages sent to people ( especially the thousands of teenagers who witness these presentations on an annual basis) can be counterproductive and, as I saw just over a week ago, dangerous. Along with the thousands of high school spectators, I saw a presentation for Remembrance Day that troubled me deeply. It was littered with inconsistency and, on the whole, espoused a rather contradictory message.   It started off with the old montage. Because of course, let's introduce an important and sensitive ...