Financial models and climate models

A few years ago we were assured that complex financial models used by banks could be relied on to correctly assess financial risk. This was supposed to ensure that banks would stay solvent, and the financial system stable. It turned out that insufficient back-testing, subtle pressure on those building the models to produce the “right” results, and the intrinsic problems of complex models, meant that the models were far from good enough.

We are also asked to trust complex models of climate change that predict rising temperatures. I am inclined to distrust complex models in general, but leaving that aside, are these likely to suffer the shortcomings of the bank’s risk models? Continue reading

Do the British really hate foreigners that much?

The government has so far come up with two ideas to reduce cap immigration, both of which would be highly damaging to the country:

  1. Let fewer students in
  2. Reduce the number of foreign workers

Take the first as it has had less attention. Educating foreign students is highly profitable for Britain and earns huge amount of money. It is like an extended, and far more profitable, version of tourism. Continue reading