Models Only Say What They’re Told to Say

When I worked in gas trading, we had a special employee who built the formulas and plotted them onto a screen to show us how a certain formula would behave in a certain market scenario. It was an almost sacral moment when he had built up his stuff to educate top management. In the end, we had to negotiate long-term gas purchases. But back then I knew already that it was all bull. In a free market, you can simulate the future, and when you do you will always be wrong. Why bother? Same thing for all other models. Nice past-time – when there is so much real work to do.

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