Newsworthy Math
A Discussion about Mathematics in Society
Cruel but Fair
It’s unfair to make fun of people for not understanding the math they were “taught” in school. But this is pretty damn priceless. It’s hard to see how even the most perfect mathematical education could have got round this level of misunderstanding.
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Credit Default Swaps
Credit default swaps are a type of insurance. I buy something that has a small risk of costing me a lot of money, it might get stolen or broken, if it’s a bond or a mortgage it might default. Rather than risk losing my whole $100, I will buy insurance for $5. You promise to [...]
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Synthetic Collateralized Alchemy
What Was Wrought CDO’s (collateralized debt obligations), see this for my introduction to these, depend on underpriced low grade debt. If I can get a 20% discount on debt that has a 10% chance of defaulting, then I should just buy this all day. All I need is enough risky debt (and some confidence in [...]
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The Unexpected Cost of Lotteries
By definition, the expected value of a one in five chance of winning $10 dollars is worth $2 ($10/5). But to human beings, with our finite life spans and our asymmetric financial needs, a one in a million chance of $1,000,000 is not necessarily worth $1, it might be worth more. Lottery tickets cost far, far more [...]
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Insurance and Mortality Curves
The life insurance business is very good at calculating the probability of you dying within the next year. It’s one of these things that we’ve being doing so long that we’re pretty good at it. Given your circumstances, they can produce a curve showing the probability of you dying at any given year from then [...]
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How Collateralized Debt Works. (And Where It Got Us.)
Collateralized debt sounds like a damn good idea, and it can be. It’s fairly complicated, but it isn’t rocket science, and it’s really worth knowing enough about to make sense of the news these days. Bad Debt: 15% Off Many relatively high risk borrowers need, or would like, credit; many investors would take a small [...]
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Why Every Educational Experiment Works
Assume that charter/experimental schools achieve better results than regular schools, which of the following is true? 1. You should try to send your child to a charter school: True False Impossible to tell with the information given 2. Regular schools should become more like charter schools: True False Impossible to tell with the information [...]
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"Show Your Working"
One of the many things that makes math difficult to learn is the seemingly universal reluctance to be comfortable with incomplete thoughts. In math terms this translates to “write down you’re intermediate results”. Kids hate to do this. If you ask them to do a multi-step problem it is an enormous struggle to get them [...]
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Simulation and Modeling
Simulation is a wonderful thing. It’s one of the foundations of mathematics. Scale models are a good example. If you want to see what the new building will look like make a model. It isn’t going to tell you everything, the architectural models of housing projects usually look wonderful, but it’s a great example of [...]
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Physical Data
RDF stores in hardware. Whatever else it turns out to be, the semantic web has already given us RDF. It’s here, it’s now, it rocks. RDF says that every data structure can be modeled using three part statements consisting of Subject, Predicate and Object. Each of these being a simple piece of data that can [...]
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