Financial Crisis and Big Data

In chapter two of Weapons of Math Destruction, Cathy O’Neils talked about her experience working in D. E Shaw, and how she found disillusioned by the WMD after the 2008 financial meltdown. She mentioned how the mathematic part of the WMD that caused the financial meltdown is why she became disillusioned with WMD.

In this chapter, she specifically talked about one aspect of the financial model: scale. In the book, she thinks that despite there are many reasons and financial strategies that led to the 2008 financial crisis, the scale of the data model is one of the most important one. She claims, “Of all the WMD qualities, the one that turned these risk models into a monstrous force of global dimension was scale.”, and said that people cannot scale their work exponentially, unlike WMDs : “It was a painstaking process, because people — unlike WMDs — cannot scale their work exponentially, and for much of the industry it was a low priority.”

The importance of evaluating risk and how scale plays a majority part in mathematics model is what I have learnt from this chapter mainly. Cathy O’Neils experience in the Wall Street and e-commerce increases my awareness that we might not be able manipulate numbers as easily as we think, as the financial crisis in 2008 clearly shows us how a model failed due the lack of scale between the companies. And the last part of the chapter where she talked about how big data algorithm manipulates, controls, and intimidates people surprises me what big data companies can do to our life. In our life nowadays, big data companies like google collects our data and show us what we “wanted” to see while we are using our phones, or using social networking apps etc. I think this is very terrifying that how big data is already tied with our life, and we can do nothing to prevent it.