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China’s plan to organize its society relies on ‘big data’ to rate everyone

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Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#141

Post by totalZero »

enraged_camel wrote: post #126
sgt101 wrote: post #116

Earlier quoted context omitted.

You are approximately right, but I don't think that they deliberately crashed the economy. I think that they were hoping for something to turn up and had good reason to think it would - after all, long term capital finance got bailed out, why not mortgage backed securities? The lesson is that the risks of finance need to be sufficiently crystalised that behaviour is moderated, the problem is that economic growth has…

>>You are approximately right, but I don't think that they deliberately crashed the economy. Deliberately, no. But they knew it was unsustainable. Many industry insiders, as well as outside observers, likened the system to a house of cards. And when you play with a house of cards, you know damn well that it will come crashing down sooner or later.

That doesn't make any sense. The derivative products were rated AAA. Banks bought these products and put them on their balance sheets. Why would they knowingly throw away money? Three investment banks totally collapsed, and several more barely survived.

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#142

Post by [deleted] »

totalZero wrote: post #81
truffelion wrote: post #74

I feel like a crazy person every time I try to point out that North America is already there. We've just done it in a less reductionist manner, in which multiple scores are used for different purposes, because you can discriminate better with better targeted data. The IRS rates you on likelihood of fraud, border patrol rates you on your likelihood of breaking residency law, the FBI rates everyone's chances of being a…

Oh, come on. We have our problems as a society but this is a little much. I have two specific objections. * The financial crisis was partially a result of mortgages being given to people whose financial data would have suggested that they had no business borrowing so much money. In that case, the opposite of your point is true. This shows that attention to data is beneficial to a mortgage system because it helps avoi…

[deleted]

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#143

Post by totalZero »

sgt101 wrote: post #119
totalZero wrote: post #98

Earlier quoted context omitted.

Parent here...I agree with you, and if you read my comments again you will see that I never said the lenders were unaware. I said the credit history data were available and would have indicated a lack of suitability for the borrowers.

I think that the lenders were aware and thought that the borrowers were unsuitable but thought that they had discovered a way that would allow high risk loans to be made safely. A lot of really clever Ph.D's had said that securitisation of these loans would work to manage and distribute the risk. I remember going to a dinner party and being lectured by one of these guys and thinking that it made no sense to me, I fel…

Interesting point. Certainly, the people who put the products together didn't do the math correctly. I think the major problem there is the assumption that homeowner defaults are independent random variables. In such a case, the high credit ratings for derivatives of subprime debt contracts would make total sense. However, if home prices decrease simultaneously and people go underwater on their loans, then suddenly there can be a massive correlation event where even the really highly rated derivative tranches are in danger.

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#144

Post by vijucat »

powerapple wrote: post #139

It is already in place. If you owe someone some money and you don't want to pay. He can sue you in court, and what the court does is that before you pay back whatever you owe, you cannot buy flight tickets, cannot take high-speech train, cannot stay in good hotels (basically any where you need to show your ID). agencies cannot book you holidays abroad and so on.

> cannot take high-speech train

This is one of the best Freudian slips / unintended puns that I have ever read. Damn right he's not taking the high-speech train anywhere in China by standing on a soapbox and complaining about Big Brother and disrupting the harmony of society.

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#145

Post by [deleted] »

totalZero wrote: post #81
truffelion wrote: post #74

I feel like a crazy person every time I try to point out that North America is already there. We've just done it in a less reductionist manner, in which multiple scores are used for different purposes, because you can discriminate better with better targeted data. The IRS rates you on likelihood of fraud, border patrol rates you on your likelihood of breaking residency law, the FBI rates everyone's chances of being a…

Oh, come on. We have our problems as a society but this is a little much. I have two specific objections. * The financial crisis was partially a result of mortgages being given to people whose financial data would have suggested that they had no business borrowing so much money. In that case, the opposite of your point is true. This shows that attention to data is beneficial to a mortgage system because it helps avoi…

[deleted]

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#146

Post by enraged_camel »

totalZero wrote: post #141
enraged_camel wrote: post #126

Earlier quoted context omitted.

>>You are approximately right, but I don't think that they deliberately crashed the economy. Deliberately, no. But they knew it was unsustainable. Many industry insiders, as well as outside observers, likened the system to a house of cards. And when you play with a house of cards, you know damn well that it will come crashing down sooner or later.

That doesn't make any sense. The derivative products were rated AAA. Banks bought these products and put them on their balance sheets. Why would they knowingly throw away money? Three investment banks totally collapsed, and several more barely survived.

>>That doesn't make any sense. The derivative products were rated AAA.

Those ratings were created as a result of significant conflict of interest. You should read John Bogle's treatise on the subject (he's the founder and retired CEO of The Vanguard Group):

http://johncbogle.com/wordpress/wp-content/uploads/2006/02/P...

"Market participants—now dominated by speculators, not investors—also joined the parade of miscreants, and our professional security analysts failed to do their job of appraising company balance sheets, largely ignoring the huge credit risks assumed by the new breed of bankers and investment bankers. And let’s not forget our credit rating agencies, which happily bestowed AAA ratings on securitized loans in return for enormous fees that were paid in return by the issuers themselves. (It’s called “conflict of interest.”) Yes, there’s plenty of blame to passaround."

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#147

Post by nl »

enraged_camel wrote: post #126
sgt101 wrote: post #116

Earlier quoted context omitted.

You are approximately right, but I don't think that they deliberately crashed the economy. I think that they were hoping for something to turn up and had good reason to think it would - after all, long term capital finance got bailed out, why not mortgage backed securities? The lesson is that the risks of finance need to be sufficiently crystalised that behaviour is moderated, the problem is that economic growth has…

>>You are approximately right, but I don't think that they deliberately crashed the economy. Deliberately, no. But they knew it was unsustainable. Many industry insiders, as well as outside observers, likened the system to a house of cards. And when you play with a house of cards, you know damn well that it will come crashing down sooner or later.

This is approximately correct.

I think it is worth noting the subtleties around "they", though. Some people thought it was unsustainable. Others were dumb and didn't. Many didn't care and just wanted to be paid, now.

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#148

Post by lagadu »

aub3bhat wrote: post #2

I just finished watching the Nosedive (Season 3, episode 1) from Black Mirror on Netflix, it shows a similar system. Unlike other Black Mirror episodes its quite well balanced. I would highly highly recommend watching it.

I really disliked this season. It's too sanitized, not anywhere as visceral or cringe-inducing as the previous ones. Hell the first episode actually had a happy ending instead of a deeply depressing one; the endings in Black Mirror always had that appeal in that they always uneeringly hammered in that there's no escaping, there are no happy endings and it can only get worse.

It just felt too "plasticky", that conclusions about the worlds displayed were being forced on me, instead of giving some room for thought.

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#149

Post by paganel »

sametmax wrote: post #112
joe_the_user wrote: post #110

Earlier quoted context omitted.

Indeed, The US may have many real privacy violations but you have at least an ostensible right to privacy. That authority figures don't have to pretend fair even if they aren't actually fair is worth something. That surveillance isn't official is worth something. Sure, solid guarantees to privacy would be better but one really shouldn't claim unofficial surveillance is the same as official surveillance since the move…

This is very naive. If working in many countries and for many entities all over the world though me anything, it's that: - people are tracked by everyone. Companies. State agencies. Other people. - the database contains much more data than you think it does. And there are more data base than you think, also most of them are not connected to each others. But people in charge are. - the data can be exploited in much mo…

> And there are more data base than you think, also most of them are not connected to each others.

I've thought about this issue a lot (I'm a data-herding obsessed guy myself), and I think that this is one of our last chances at decent privacy, I mean, the fact that there are still many unconnected databases containing our data instead of one big blob where search for relevant info would be much easier. I'm still hoping that enough things get lost in "translation" between these several databases so that the info becomes less intrusive, and that some of the databases will eventually become "deprecated" i.e. data will become stalled.

> It is abused on a daily basis, but the consequences are not too insufferable yet.

Just the other day I found out about a guy whose credit application had been rejected by the bank because he had gotten a police ticket a couple of years ago for "public disturbance" (some neighbors called the cops when he was throwing a party at his house). What was crazy is that the matter hadn't gone through any legal court, it was just saved as a ticket stored in the police's database and probably the local tax-office's DB (the police tickets are collected by the local tax office). I can't really fathom how a private entity (the bank) got hold of that information. (I live in Eastern Europe, if it matters)

Re: China’s plan to organize its society relies on ‘big data’ to rate everyone

#150

Post by threepipeproblm »

lagadu wrote: post #148
aub3bhat wrote: post #2

I just finished watching the Nosedive (Season 3, episode 1) from Black Mirror on Netflix, it shows a similar system. Unlike other Black Mirror episodes its quite well balanced. I would highly highly recommend watching it.

I really disliked this season. It's too sanitized, not anywhere as visceral or cringe-inducing as the previous ones. Hell the first episode actually had a happy ending instead of a deeply depressing one; the endings in Black Mirror always had that appeal in that they always uneeringly hammered in that there's no escaping, there are no happy endings and it can only get worse. It just felt too "plasticky", that conclus…

It was my favorite season. I probably won't watch Episodes 1 or 6 again, but I thought the middle ones were consistently great. The one with "roaches" I seemed like it had excellent warning value as we enter the world of augmented reality.

Not trying to start an argument over matters of taste, just interesting to see how opinions differ! It does seem like in season 3 -- aside from the episode everyone is talking about in relevant to this thread -- they run with more of the "sci fi premise" approach, as opposed to making you feel like this is a just around the corner, as some of the first seasons did.

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