November 28, 2012

My review of Nate Silver's "The Signal and the Noise" in Taki's

From my book review in Taki's Magazine:
Nate Silver is most famous for steadily predicting Barack Obama’s reelection (which, as you may have heard, happened). Yet his new bestseller The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t is a fine all-around introduction to the science and art of forecasting, with interesting examples drawn from many fields. 
For example: You know those ten-day weather forecasts? Predicting the first week has gotten reasonably reliable, but the ninth and tenth days, Silver reports, are useless. They may even be negatively correlated with what actually transpires. 
The Signal and the Noise starts weakly with the oft-told cautionary tale of how credit-rating agencies such as Moody’s and Standard & Poor’s missed the subprime mortgage bubble. Fortunately, it improves as the author turns to topics with which he has more personal familiarity, such as sports, gambling, and sports gambling. 
Indeed, The Signal and the Noise is one of the better Frequent Flyer books of recent years.

Read the whole thing there.

14 comments:

Anonymous said...

Here was Michael Lewis in January 2007, right before the bubble really started to burst, reporting from the Davos conference:

"Derivatives seem to be this year’s case in point. Davos had hardly been up and groaning about the dangers of being alive before Bloomberg News reported what appears to be the general Davosian view: 'The surging demand for derivatives is making financial markets more vulnerable to any slowdown in the global economy'... - but not a worrisome fact in sight. None of them seemed to understand that when you create a derivative you don’t add to the sum total of risk in the financial world; you merely create a means for redistributing that risk. They have no evidence that financial risk is being redistributed in ways we should all worry about. They’re just — worried. But the most striking thing about the growing derivatives markets is the stability that has come with them."

It's obscene that he's able to make money in the frequent flier book market or write about the financial crisis and housing bubble without being laughed out of the room.

Veracitor said...

Oft-told tale? Like hell. The NRSRO's (securities raters), cozy in their SEC-managed cartel and paid by issuers, not buyers, didn't "miss" the bubble, they simply took payoffs to issue phony ratings!

Anonymous said...

"I pointed out to him in our debate in Slate that the murder rate among juveniles born just after Roe v. Wade was several times higher than for the cohort born just before legalization."

But there were fewer black babies. The crime rate was higher but rate of black births declned.

Anonymous said...

"Lewis, however, left out the less-appealing news that Oakland had been Ground Zero of baseball’s steroids epidemic ever since Beane’s mentor Sandy Alderson had brought together Jose Cansecoand Mark McGwire in the 1980s."

Media certainly juiced up Obie.

Anonymous said...

Maybe steroids don't really matter in baseball cuz all teams have used it, prolly in equal measure.

LemmusLemmus said...

If I may, I would like to recommend that you stop talking about how you were right about the abortion-crime link. If I am anything to go by, it gets on people's nerves.

Otherwise, a fine review of a fine book.

Anonymous said...

LemmusLemmus said...
"If I may, I would like to recommend that you stop talking about how you were right about the abortion-crime link. If I am anything to go by, it gets on people's nerves."

Why does it bother you? The man was right, he should say so...

ben tillman said...

I was disappointed to find that the article said so little about sports gambling.

Anonymous said...

Interesting theory about Billy Beane, the As and steroids. But why don't you go further. Let's say you had a sports team that you filled with second tier players and juiced them up. You get into the play offs but the inevitable rumors about steroids start surfacing. So you hire a prominent intellectual with an elite background to write a book about how you used statistics to put together a team of second tier players that because of their amazing team work played like they were juiced.

Actually all of Micheal Lewis' books could be described as explaining that the game is not fixed, nobody is cheating, the hero of the story used sound rational techniques to win fair and square.

Anonymous said...

Nate Silver on Google Talks

http://www.youtube.com/watch?v=mYIgSq-ZWE0&feature=g-subs-u

Anonymous said...

Nate Silver's poker carrier.

I am a bit skeptical of these stories of successful people like Silver that win at poker or were successful card counters. It really is impossible to confirm how well they did, but the stories are easy to embellish.

The best I could find was:
http://www.bluff.com/players/nate-silver/64976/player-profile.asp

I may be wrong to say he exaggerated but my poker experience indicates that to be successful at poker you need much more that a mathematical mind. Assuming you don't cheat poker is very tedious and requires sharp concentration over a period of many hours, not to mention an amazing memory for minor details. I have my doubts about people who make such claims. Poker is just to hard to do day after day for years. But then again I say the same thing about knitting.

Anonymous said...

Here's Nate Silver validating a lot of liberal stereotypes about backward red state whites for an audience of elite whites, and making some dubious proposals for ameliorating racial problems:

http://www.ted.com/talks/nate_silver_on_race_and_politics.html

He'll fit right in on the Gladwell circuit.

DCThrowback said...

@anon 3:42pm Pure poppycock. Lewis spent very little time explaining how Zito, Hudson and Mulder, the A's three ace-like starters for much of the "moneyball" era, were the backbone of the success of the team, more important than picking up guys like Scott Hatteberg.

Norville Rogers said...

re: Frequent Flyer books

A veritably huge newish genre--Thomas L. Friedman-style potboilers on the theme "Everything You Know Is Wrong." Before these tomes like 10,000 Hours of the Flat Earth Disruptive Game-changer you might buy Stephen King's or Clancy's latest, or a Michael Crichton techno-thriller about runaway computer viruses. Future historians of airport lit will have to evaluate the supply of clever mountebanks in the field, e.g. Jonah Lehrer (subject of exhaustive recent takedown in NY mag). Michael Lewis's next one can be a treatise on the swarm of bright dynamos who flocked to Frequent Flyer writing yet flew too close to the sun, "Aspenball" or possibly "Sick Sigma"