Showing posts sorted by relevance for query numbers. Sort by date Show all posts
Showing posts sorted by relevance for query numbers. Sort by date Show all posts

Monday, February 07, 2011

US Military versus Economic Power in the New Millennium

While the power of the US military-industrial complex remains undisputed around the world, China seems to have usurped America’s position of leadership in global trade and economic policy-making. The irony is that China is viewed by many in the West as a “communist” and therefore economically deprived country. Yet, America is quickly losing stature economically and politically to China, even while US military forces remain deployed overseas in army-scale formations commanded by four-star generals with vast numbers of air, sea, and ground assets engaged in active military operations.

As a matter of history, the Chinese People's Liberation Army (PLA) has never deployed significant numbers of troops overseas since its founding as a guerrilla force in 1927. Conversely, the US has maintained signficiant numbers of troops overseas in places such as Korea, Germany, Italy, Okinawa, the Phillippines, and elsewhere on a more or less constant basis since World War II.


Given America's capitalist advantage coupled with the continued preponderance of US military power, how is it that China with its emerging economy is gaining in economic influence and prestige at the expense of the US? Prof Nouriel Roubini and Dr Ian Bremmer offer the following explanation for America’s changing fortunes in recent years:
From 1945 until 1990, the global balance of power was defined primarily by relative differences in military capability. It was not market-moving innovation or cultural dynamism that bolstered the Soviet bloc’s prominence within a bipolar international system. It was raw military power. Today, it is the centrality of China and other emerging powers to the future of the global economy, not the numbers of their citizens under arms or the weapons at their disposal, that make their choices crucial for the United States’ future.
Perhaps America could learn a lesson about economic policy from the Chinese experience. With the US now enduring a dramatic economic decline, perhaps our nation should begin a public debate regarding how scarce economic resources can best be allocated between “guns” and “butter” in the coming years...

Source: Bremmer, I and Roubini, N (2011, January 31), The G-Zero World: The New Economic Club Will Produce Conflict, Not Cooperation, Foreign Affairs.

Tuesday, August 10, 2010

Human Suffering is Absolute

The expanding Main Street Depression in the US is now accelerating, and in absolute terms, the level of human suffering reached to date surpasses that of the Great Depression of the 1930's. According to the Bureau of Labor Statistics, more than 15.1 million Americans were unemployed as of July 2010. In contrast, 12.8 million Americans were unemployed at the peak of the Great Depression in 1933.

[Click image to expand]

I personally refuse to marginalize human suffering using ratio analysis, and I would urge our fiscal and monetary policy-makers to do the same. When historians study wars, they count casualties in absolute numbers of souls rather than as percentages of some given population. Likewise, economists must learn to study depressions using the absolute numbers of people effected. The Main Street Depression now imploding America is a horrific event in our nation's history that needs to be understood in absolute terms and numbers that make it real rather than abstract. Said another way, economists must learn that human suffering is absolute.

Related Posts:

Main Street Depression Imploding America

Percentage Employed in US Continues Slide

Unemployed Should Consider Emigration

Depressions Past and Present

Main Street USA in Economic Depression

Sunday, February 06, 2011

How to Setup a Football Pool

Have you ever wondered how to setup a football pool at your office or for a party? In fact, setting up an office or party pool is easier than you might think. Simply follow the steps below:

1. Open the Excel spreadsheet template linked at the bottom of this article, and print the contents of the file using a personal computer printer. Your grid will resemble that shown below.


2. Prepare your numbers by writing the numbers 1 through 10 on individual slips of paper. Place the ten slips of paper into a bowl (or hat). Set the bowl aside until after you complete steps 3 through 5.

3. Determine the buy-in amount preferred by your participants (for example, $1 per square to buy-in, which creates a $100 pool).

4. Upon establishing the buy-in amount, decide how much the payouts will be based on game events and record these amounts and events somewhere in the margin space of the grid sheet you created in step 1. Below is a sampling of potential payouts that may be proffered assuming all squares sell for $1 each creating a $100 total pool:
  • End of Q1: $20
  • End of Q2 (half-time): $20
  • End of Q3: $20
  • End of Q4: $20
  • Final score in the event of overtime: $10; if no overtime, Q4 winner wins this as well.
  • Reverse Score: $10
5. Sell all 100 squares for the buy-in amount determined in step 3 and hold the proceeds in safekeeping. As each buy-in is received, record the name of the participant in one of the boxes in the white ara of the grid.

6. Once you have sold all 100 squares (and before the game kicks-off), write the name of either team in the space at the top of the grid sheet created in step 1, followed by the name of the opposing team along the left side of the grid in the space provided. Begin to draw slips from the bowl you created in step 2 above and record the number from each slip in the shaded area along the top of the grid from left to right. After you have filled in all ten spaces across the top, return the slips to the bowl and repeat this procedure filling in the spaces along the left of the grid from top to bottom. You may discard the slips of paper once you finish.

7. Your 10-by-10 grid should now have a team name at the top and at the side. You should also have a number recorded in each box across the top and down the left side of the grid. Finally, you should have the name of one participant in each of the 100 cells contained in the grid.

8. Record the official score at the end of the 1st quarter, the half, the third quarter and the final score.

9. Cross reference the last digit of each team's score at each event using your grid to determine which of your participants wins each payout determined in step 4.

Good luck and have fun!

Excel 10x10 Football Pool Template

PS: Keep in mind that public gambling is a regulated industry in most states.

Tuesday, April 24, 2012

101 Things Every Six Sigma Black Belt Should Know

by Thomas Pyzdek, Copyright © 2003

  1. In general, a Six Sigma Black Belt should be quantitatively oriented.
  2. With minimal guidance, the Six Sigma Black Belt should be able to use data to convert broad generalizations into actionable goals.
  3. The Six Sigma Black Belt should be able to make the business case for attempting to accomplish these goals.
  4. The Six Sigma Black Belt should be able to develop detailed plans for achieving these goals.
  5. The Six Sigma Black Belt should be able to measure progress towards the goals in terms meaningful to customers and leaders.
  6. The Six Sigma Black Belt should know how to establish control systems for maintaining the gains achieved through Six Sigma.
  7. The Six Sigma Black Belt should understand and be able to communicate the rationale for continuous improvement, even after initial goals have been accomplished.
  8. The Six Sigma Black Belt should be familiar with research that quantifies the benefits firms have obtained from Six Sigma.
  9. The Six Sigma Black Belt should know or be able to find the PPM rates associated with different sigma levels (e.g., Six Sigma = 3.4 PPM).
  10. The Six Sigma Black Belt should know the approximate relative cost of poor quality associated with various sigma levels (e.g., three sigma firms report 25% COPQ).
  11. The Six Sigma Black Belt should understand the roles of the various people involved in change (senior leader, champion, mentor, change agent, technical leader, team leader, facilitator).
  12. The Six Sigma Black Belt should be able to design, test, and analyze customer surveys.
  13. The Six Sigma Black Belt should know how to quantitatively analyze data from employee and customer surveys. This includes evaluating survey reliability and validity as well as the differences between surveys.
  14. Given two or more sets of survey data, the Six Sigma Black Belt should be able to determine if there are statistically significant differences between them.
  15. The Six Sigma Black Belt should be able to quantify the value of customer retention.
  16. Given a partly completed QFD matrix, the Six Sigma Black Belt should be able to complete it.
  17. The Six Sigma Black Belt should be able to compute the value of money held or invested over time, including present value and future value of a fixed sum.
  18. The Six Sigma Black Belt should be able to compute present value and future value for various compounding periods.
  19. The Six Sigma Black Belt should be able to compute the breakeven point for a project.
  20. The Six Sigma Black Belt should be able to compute the net present value of cash flow streams, and to use the results to choose among competing projects.
  21. The Six Sigma Black Belt should be able to compute the internal rate of return for cash flow streams and to use the results to choose among competing projects.
  22. The Six Sigma Black Belt should know the COPQ rationale for Six Sigma (i.e., the Six Sigma Black Belt should be able to explain what to do if COPQ analysis indicates that the optimum for a given process is less than Six Sigma).
  23. The Six Sigma Black Belt should know the basic COPQ categories and be able to allocate a list of costs to the correct category.
  24. Given a table of COPQ data over time, the Six Sigma Black Belt should be able to perform a statistical analysis of the trend.
  25. Given a table of COPQ data over time, the Six Sigma Black Belt should be able to perform a statistical analysis of the distribution of costs among the various categories.
  26. Given a list of tasks for a project, their times to complete, and their precedence relationships, the Six Sigma Black Belt should be able to compute the time to completion for the project, the earliest completion times, the latest completion times and the slack times. The Six Sigma Black Belt should also be able to identify which tasks are on the critical path.
  27. Give cost and time data for project tasks, the Six Sigma Black Belt should be able to compute the cost of normal and crash schedules and the minimum total cost schedule.
  28. The Six Sigma Black Belt should be familiar with the basic principles of benchmarking.
  29. The Six Sigma Black Belt should be familiar with the limitations of benchmarking.
  30. Given an organization chart and a listing of team members, process owners, and sponsors, the Six Sigma Black Belt should be able to identify projects with a low probability of success.
  31. The Six Sigma Black Belt should be able to identify measurement scales of various metrics (nominal, ordinal, etc).
  32. Given a metric on a particular scale, the Six Sigma Black Belt should be able to determine if a particular statistical method should be used for analysis.
  33. Given a properly collected set of data, the Six Sigma Black Belt should be able to perform a complete measurement system analysis, including the calculation of bias, repeatability, reproducibility, stability, discrimination (resolution) and linearity.
  34. Given the measurement system metrics, the Six Sigma Black Belt should know whether or not a given measurement system should be used on a given part or process.
  35. The Six Sigma Black Belt should know the difference between computing sigma from a data set whose production sequence is known and from a data set whose production sequence is not known.
  36. Given the results of an AIAG Gage R&R study, the Six Sigma Black Belt should be able to answer a variety of questions about the measurement system.
  37. Given a narrative description of “as-is” and “should-be” processes, the Six Sigma Black Belt should be able to prepare process maps.
  38. Given a table of raw data, the Six Sigma Black Belt should be able to prepare a frequency tally sheet of the data, and to use the tally sheet data to construct a histogram.
  39. The Six Sigma Black Belt should be able to compute the mean and standard deviation from a grouped frequency distribution.
  40. Given a list of problems, the Six Sigma Black Belt should be able to construct a Pareto Diagram of the problem frequencies.
  41. Given a list which describes problems by department, the Six Sigma Black Belt should be able to construct a cross tabulation and use the information to perform a Chi-square analysis.
  42. Given a table of x and y data pairs, the Six Sigma Black Belt should be able to determine if the relationship is linear or non-linear.
  43. The Six Sigma Black Belt should know how to use non-linearity’s to make products or processes more robust.
  44. The Six Sigma Black Belt should be able to construct and interpret a run chart when given a table of data in time-ordered sequence. This includes calculating run length, number of runs and quantitative trend evaluation.
  45. When told the data are from an exponential or Erlang distribution the Six Sigma Black Belt should know that the run chart is preferred over the standard X control chart.
  46. Given a set of raw data, the Six Sigma Black Belt should be able to identify and compute two statistical measures each for central tendency, dispersion, and shape.
  47. Given a set of raw data, the Six Sigma Black Belt should be able to construct a histogram.
  48. Given a stem & leaf plot, the Six Sigma Black Belt should be able to reproduce a sample of numbers to the accuracy allowed by the plot.
  49. Given a box plot with numbers on the key box points, the Six Sigma Black Belt should be able to identify the 25th and 75th percentile and the median.
  50. The Six Sigma Black Belt should know when to apply enumerative statistical methods, and when not to.
  51. The Six Sigma Black Belt should know when to apply analytic statistical methods, and when not to.
  52. The Six Sigma Black Belt should demonstrate a grasp of basic probability concepts, such as the probability of mutually exclusive events, of dependent and independent events, of events that can occur simultaneously, etc.
  53. The Six Sigma Black Belt should know factorials, permutations and combinations, and how to use these in commonly used probability distributions.
  54. The Six Sigma Black Belt should be able to compute expected values for continuous and discrete random variables.
  55. The Six Sigma Black Belt should be able to compute univariate statistics for samples.
  56. The Six Sigma Black Belt should be able to compute confidence intervals for various statistics.
  57. The Six Sigma Black Belt should be able to read values from a cumulative frequency ogive.
  58. The Six Sigma Black Belt should be familiar with the commonly used probability distributions, including: hypergeometric, binomial, Poisson, normal, exponential, Chi-square, Student’s t, and F.
  59. Given a set of data the Six Sigma Black Belt should be able to correctly identify which distribution should be used to perform a given analysis, and to use the distribution to perform the analysis.
  60. The Six Sigma Black Belt should know that different techniques are required for analysis depending on whether a given measure (e.g., the mean) is assumed known or estimated from a sample. The Six Sigma Black Belt should choose and properly use the correct technique when provided with data and sufficient information about the data.
  61. Given a set of subgrouped data, the Six Sigma Black Belt should be able to select and prepare the correct control charts and to determine if a given process is in a state of statistical control.
  62. The above should be demonstrated for data representing all of the most common control charts.
  63. The Six Sigma Black Belt should understand the assumptions that underlie ANOVA, and be able to select and apply a transformation to the data.
  64. The Six Sigma Black Belt should be able to identify which cause on a list of possible causes will most likely explain a non-random pattern in the regression residuals.
  65. If shown control chart patterns, the Six Sigma Black Belt should be able to match the control chart with the correct situation (e.g., an outlier pattern vs. a gradual trend matched to a tool breaking vs. a machine gradually warming up).
  66. The Six Sigma Black Belt should understand the mechanics of PRE-Control.
  67. The Six Sigma Black Belt should be able to correctly apply EWMA charts to a process with serial correlation in the data.
  68. Given a stable set of subgrouped data, the Six Sigma Black Belt should be able to perform a complete Process Capability Analysis. This includes computing and interpreting capability indices, estimating the % failures, control limit calculations, etc.
  69. The Six Sigma Black Belt should demonstrate an awareness of the assumptions that underlie the use of capability indices.
  70. Given the results of a replicated 22 full-factorial experiment, the Six Sigma Black Belt should be able to complete the entire ANOVA table.
  71. The Six Sigma Black Belt should understand the basic principles of planning a statistically designed experiment. This can be demonstrated by critiquing various experimental plans with or without shortcomings.
  72. Given a “clean” experimental plan, the Six Sigma Black Belt should be able to find the correct number of replicates to obtain a desired power.
  73. The Six Sigma Black Belt should know the difference between the various types of experimental models (fixed-effects, random-effects, mixed).
  74. The Six Sigma Black Belt should understand the concepts of randomization and blocking.
  75. Given a set of data, the Six Sigma Black Belt should be able to perform a Latin Square analysis and interpret the results.
  76. Ditto for one way ANOVA, two way ANOVA (with and without replicates), full and fractional factorials, and response surface designs.
  77. Given an appropriate experimental result, the Six Sigma Black Belt should be able to compute the direction of steepest ascent.
  78. Given a set of variables each at two levels, the Six Sigma Black Belt can determine the correct experimental layout for a screening experiment using a saturated design.
  79. Given data for such an experiment, the Six Sigma Black Belt can identify which main effects are significant and state the effect of these factors.
  80. Given two or more sets of responses to categorical items (e.g., customer survey responses categorized as poor, fair, good, excellent), the Six Sigma Black Belt will be able to perform a Chi-Square test to determine if the samples are significantly different.
  81. The Six Sigma Black Belt will understand the idea of confounding and be able to identify which two factor interactions are confounded with the significant main effects.
  82. The Six Sigma Black Belt will be able to state the direction of steepest ascent from experimental data.
  83. The Six Sigma Black Belt will understand fold over designs and be able to identify the fold over design that will clear a given alias.
  84. The Six Sigma Black Belt will know how to augment a factorial design to create a composite or central composite design.
  85. The Six Sigma Black Belt will be able to evaluate the diagnostics for an experiment.
  86. The Six Sigma Black Belt will be able to identify the need for a transformation in y and to apply the correct transformation.
  87. Given a response surface equation in quadratic form, the Six Sigma Black Belt will be able to compute the stationary point.
  88. Given data (not graphics), the Six Sigma Black Belt will be able to determine if the stationary point is a maximum, minimum or saddle point.
  89. The Six Sigma Black Belt will be able to use a quadratic loss function to compute the cost of a given process.
  90. The Six Sigma Black Belt will be able to conduct simple and multiple linear regression.
  91. The Six Sigma Black Belt will be able to identify patterns in residuals from an improper regression model and to apply the correct remedy.
  92. The Six Sigma Black Belt will understand the difference between regression and correlation studies.
  93. The Six Sigma Black Belt will be able to perform Chi-square analysis of contingency tables.
  94. The Six Sigma Black Belt will be able to compute basic reliability statistics (MTBF, availability, etc).
  95. Given the failure rates for given subsystems, the Six Sigma Black Belt will be able to use reliability apportionment to set MTBF goals.
  96. The Six Sigma Black Belt will be able to compute the reliability of series, parallel, and series-parallel system configurations.
  97. The Six Sigma Black Belt will demonstrate the ability to create and read an FMEA analysis.
  98. The Six Sigma Black Belt will demonstrate the ability to create and read a fault tree.
  99. Given distributions of strength and stress, the Six Sigma Black Belt will be able to compute the probability of failure.
  100. The Six Sigma Black Belt will be able to apply statistical tolerancing to set tolerances for simple assemblies. The Six Sigma Black Belt will know how to compare statistical tolerances to so-called “worst case” tolerancing.
  101. The Six Sigma Black Belt will be aware of the limits of the Six Sigma approach.
Reproduced with kind permission of Six Sigma Training

Source: Pyzdek, T (2003), 101 Things Every Six Sigma Black Belt Should Know, Six Sigma Training.

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Friday, November 23, 2012

The Code: Numbers



Follow the link below for more videos included in the BBC series, The Code.

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Sunday, November 11, 2012

“I read Nate Silver. I’m a fan of Nate Silver. State senator, you’re no Nate Silver.”

by Sherman Dorn © 2012

The takeaway from the Nate Silver-punditry smackdown this fall is not that any quantification and set of algorithms beat the pants off your nearest broadcast yodeler, but that quantification done well will beat the pants off your nearest broadcast yodeler, and that your nearest broadcast yodeler presents the equivalent of the Washington Generals in battles with professionally competent quantification.


For the best argument about this, go no further than Nate Silver’s new book, The Signal and the Noise, which is largely about modesty in quantification and the difficulty of constructing accurate prediction systems. If you want a panegyric to algorithms, you instead need Christopher Steiner’s Automate This. Steiner is entertaining and should be the publicist for Sal Kahn, the School of One, and so on, but Silver is more realistic.

In particular, Silver addresses uncertainty in an explicit and transparent manner, in both his analysis of polling and in his discussion of predictions more broadly. The largest gap between Silver’s approach and the public discussion of quantification in education is the almost complete failure of both reporters and policymakers to address uncertainties in an open manner.[1] If any advocate, policymaker, or pundit uses Nate Silver (as an object lesson) to argue in favor of current practices in test-based accountability or the use of point estimates in any proposed policy, they are demonstrating that they haven’t read his book. To wit, the title of this entry.

Wonkish regret/adjustment: Silver also makes a wonderful argument in favor of probabilistic reasoning, specifically a Bayesian approach to statistics, though I suspect he will be less successful in that argument. Frequentists won the professional debate 100 years ago, and the standard introduction to statistics is rooted firmly in frequentism (quick: do you use the term “confidence interval” or “credibility interval”?).[2] But in addition to the dominance of frequentist approaches in professional training, it is also very difficult to think about probability in the abstract and more specifically to reason through quantification in the frame of conditional probability (the main engine of the Bayes theorem). If you want to test your ability to reason abstractly about conditional probability, see how much you resist the basic solution to the Monty Hall problem. Trust me: humans are pretty awful about this, even with quite a bit of education.

Fortunately, you don’t always have to think abstractly about conditional probability to use it. At least in relatively simple cases, there are two ways to get around our brains’ general incompetence at probabilistic reasoning: using real numbers in hypotheticals (for basic questions of conditional probability) or using a moderately-sized set of simulations to understand the dynamics of a simple system (what I used in September to look at the Chingos/Peterson research on whether the privately-funded voucher program they studied had consequences for college attendance). But we tend to have this blind spot and need to know how to get around it in some way.

Where Silver is inconsistent: Silver is less transparent in his own practice about building models and using human judgment (his exact models are proprietary), but both appear in the book. I’d pay more attention to his book than his practice here, at least in terms of using quantification in practice. Silver correctly sees landmines everywhere for those wanting to predict the performance of ballplayers to earthquakes, and he argues that the remarkable success in weather forecasting has depended on both increasingly detailed information about the atmosphere and also the human judgment that forecasters use in making predictions about tomorrow’s weather and the next three days of the tropical storm track. For that to make sense for public policy, the models should be public.

Notes

1. Researchers also tend to believe that their research findings are more accurate and trustworthy than they are, something Silver discusses in his book. Yes, research psychologists have studied the extent to which research psychologists are numerate.

2. Silver’s academic/training background is an undergraduate degree in economics from the University of Chicago, and then four years of work at KMPG.

Source: Dorn, S (2012, November 7), “I read Nate Silver. I’m a fan of Nate Silver. State senator, you’re no Nate Silver.” Sherman Dorn.

Republished with kind permission of Sherman Dorn © 2012

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Sunday, November 27, 2011

Krugman on Class Warfare

According to Prof Paul Krugman,
The notion that denying health care to the near-poor is a serious deficit-reduction policy, but raising taxes on the very rich is not, is not something you can justify at all on the basis of the actual numbers. Anyone who says different is practicing, well, class warfare.
Read More

Prof Paul Robin Krugman (1953- )

Source: Krugman, P (2011, November 26), Money At The Top, New York Times Online.

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Thursday, May 27, 2010

The Post-Modern Apocalypse

The Four Horsemen of the Apocalypse have apparently post-modernized their objectives from war, famine, pestilence, and death, into terrorism, austerity, pollution, and disease. The irony is that these apocalyptic risks have been effectively “sloganized” by our political establishment along the way. Clearly, elitism and populism lack the numbers to prevail against these post-modern threats; pluralism is society’s only hope for a safer future.

Saturday, December 22, 2012

The National Math and Science Initiative

As reported by the National Math and Science Initiative:
The US is failing to produce and retain sufficient numbers of qualified math and science teachers to keep America internationally competitive. It is estimated that the US will need 280,000 more math and science teachers by 2015. Talented math and science teachers with strong content knowledge are urgently needed to help students reach their potential.
Learn More


I applaud this 21st century education program. Our nation needs more professionals with advanced skills in science, technology, engineering, and mathematics (STEM) has never been greater. To meet this challenge, the US must expand its cadre of talented mathematics and science teachers in the public school system. Again, I endorse the National Math and Science Initiative.

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Tuesday, March 18, 2008

Competing on Analytics

Now that analytics have come into vogue, we are seeing the beginnings of what might be called “quantitative showmanship” whereby companies leverage their analytic capacities in the marketplace seeking competitive advantage. Still, it is difficult to “fake” analytic reasoning, which might explain why competing on analytics is so powerful. In truth, while some companies are truly taking the lead in analytics, others may be deluding themselves into believing their analytic capabilities are greater than they are.

Companies seeking to become analytically competitive should first assess the current state of their extant capabilities. Prof Thomas Davenport and Jeanne Harris in their book, Competing on Analystics (Harvard, 2007), present a framework of five stages of analytic development (see below). "These stages can describe the path that an organization can follow from having virtually no analytical capabilities to being a serious analytical competitor." But, while many companies fancy themselves to be analytic competitors, many possess only localized capacities, and some are simply analytically impaired.

Source: Adapted from Davenport & Harris, Competing on Analytics (2007), p. 35.

Being someone who works with analysts from around the world on a regular basis, I have a unique vantage point from which to assess how companies and governments are doing. Here are some lines that epitomize what I see more often than not:

Leaders who “don’t get it.” There is nothing more discouraging for an analyst than the leader who listens to an analytical proposition, and then asks something like, "is this experimental?” Leaders who are not versed in financial risk analysis might consider reviewing these subjects with a statistics coach in order to reacquire their poise and confidence with quantitative reasoning.

People who “hate” numbers. Let’s face it, not everyone is an analyst, which is fine. Still, some people truly despise thinking quantitatively. As companies foray deeper into analytical competition, it is necessary that we begin to recognize and advance the people who in fact “love” to think quantitatively.

Processes that “swirl” in support of conjecture. For example, many IT installations are premised on false hopes and promises, and implementation of technology solutions in isolation cannot affect analytic advantage. It is important that we begin to discipline IT departments to ground technology projects upon facts that are validated by hard rather than soft evidence.

Technology that fails to capture, sort, and make sense of data. For example, companies have reached the point where fancy office applications alone do nothing to add value. What is needed are better analytical tools that have the capacity to acquire, encode, modulate, and output information arrays in a form that is useful and actionable for creating and sustaining competitive advantage.

While I am delighted to see analytics moving into the limelight, we have a long way to go before companies across America can honestly claim to be analytic competitors.

Sunday, September 05, 2010

Business Intelligence = Data + Analytics

We might all find inspiration from IBM's recent advertising regarding the future of business intelligence, data, and analytics.



For more information, visit:

A Smarter Planet

Related Posts:

The Art and Science of Data Enjoined

Nature by Numbers

The Fourth Paradigm: Data-Intensive Scientific Discovery

Friday, January 29, 2010

Analytics at Work: Lessons from the 2007-2009 Financial Crisis

Prof Thomas H Davenport, Jeanne G Harris, and Robert Morison (2010) posit two major lessons learned from the 2007-2009 financial crisis:
Financial firms need to radically change their analytical focus. They need to make the assumptions behind their models much more explicit and transparent. They need to incorporate the systematic monitoring of analytical models into their businesses. They -- and their regulators -- need to be skeptical about the ability to model and manage risk in extraordinary time.
But, their "most important" lesson is directed specifically at management itself:
Financial executives need to learn much more about the models that are running their businesses. In search of outsized returns, they've taken on investment and debt securities that are bundled up in algorithmic combinations that they don't understand. Cowed by this accumulation of daunting numbers, these executives have abdicated responsibility for managing risk.
Reference: Davenport, T H, Harris, J G, & Morison, R (2010), Analytics at Work: Smarter Decisions, Better Results, Boston, MA: Harvard Business.

Monday, November 07, 2011

Nevada Makes Foreclosure Fraud A Felony

According Nick Timiraos of the Wall Street Journal (2011, Nov 7):
Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.... Nevada’s state Assembly passed a measure that took effect on Oct 1 designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case.... Among other steps, the Nevada law makes it a felony — and threatens to hold individuals criminally liable — for making false representations concerning real estate title. Individuals are also subject to civil penalties of $5,000 for each violation.
Other states should follow Nevada's lead by passing and enforcing laws designed to discourage incidents of title fraud by banks and others in the courts. Foreclosure rates in Nevada have lead the nation since the financial crisis began in 2008.


Source: Timiraos, N (2011, Nov 7), Nevada Foreclosure Filings Dry Up After ‘Robo-Signing’ Law, Wall Street Journal Online.

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Saturday, October 08, 2011

Data-Driven Documents

Introducing D3.js, a free JavaScript library created by Michael Bostock for manipulating documents based upon data:
D3 allows you to bind arbitrary data to a Document Object Model (DOM), and then apply data-driven transformations to the document. As a trivial example, you can use D3 to generate a basic HTML table from an array of numbers. Or, use the same data to create an interactive SVG bar chart with smooth transitions and interaction.... D3 is not a traditional visualization framework. Rather than provide a monolithic system with all the features anyone may ever need, D3 solves only the crux of the problem: efficient manipulation of documents based on data. This gives D3 extraordinary flexibility, exposing the full capabilities of underlying technologies such as CSS3, HTML5 and SVG. It avoids learning a new intermediate proprietary representation. With minimal overhead, D3 is extremely fast, supporting large datasets and dynamic behaviors for interaction and animation. And, for those common needs, D3’s functional style allows code reuse through a diverse collection of optional modules.
Follow the link below to see examples and download a copy of the software, as well as to learn more about Michael Bostock's other projects.

Learn More

Force-Directed Graph (created with J3.js)

Source: D3.js

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Monday, January 30, 2012

Charles Seife: On Mathematical Deception

Prof Charles Seife cautions vigilance in the face of what he describes as "the dark arts of mathematical deception."



I regret that good people continue to be bamboozled and victimized by numerical charlatans who prey upon our society. The newest approach to mathematical deception is through distorted visualizations and graphics. Ironically, many of the "dashboard" solutions that are in current use in enterprise have never been tested for validity or reliability. Consumers of quantitative intelligence would be wise to look well beyond the numbers and graphics into the sources of data and confidence testing that was used in support of analytical conclusions.

As a business intelligence and quantitative professional, I am constantly detecting subtle to blatant methodological violations in the literature. In particular, government research is not immune to these violations. When in doubt, be certain to consult with an independent analytics professional before relying upon any reports and evidence required for major decisions that entail potential catastrophic loss of assets, life, or freedom. Remember that the marketplace, hospitals, and courtrooms are still very dangerous places.

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Sunday, September 18, 2011

Business Schools Plan Leap Into Data

Faced with an increasing stream of data from the Web and other electronic sources, many companies are seeking managers who can make sense of the numbers through the growing practice of data analytics, also known as business intelligence. Finding qualified candidates has proven difficult, but business schools hope to fill the talent gap.

Read More


Source: Korn, M & Tibken, S (2011, August 4), Business Schools Plan Leap Into Data, Wall Street Journal Online.

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Wednesday, April 07, 2010

The Reality of Risk

Risk is a polyvalent term that defies definition and measurement. Yet, I am certain that risk, like danger, is real. I would suggest that the shadows depicted below allegorically warn of possible dangers. Likewise, words and numbers can also convey information regarding impending risks and dangers. Analyzing historical data and experiences is how we as a society persevere and survive in what is arguably a dangerous universe. To dismiss risk as illusory would be naĂŻve.


Related Posts:

Risk versus Danger

Friday, September 02, 2011

Visualize This

Visualize This by Nathan Yau (Wiley, 2011) is mandatory reading for business intelligence specialists -- more at:



According to the publisher:
Data doesn't decrease; it is ever-increasing and can be overwhelming to organize in a way that makes sense to its intended audience. Wouldn't it be wonderful if we could actually visualize data in such a way that we could maximize its potential and tell a story in a clear, concise manner? Thanks to the creative genius of Nathan Yau, we can. With this full-color book, data visualization guru and author Nathan Yau uses step-by-step tutorials to show you how to visualize and tell stories with data. He explains how to gather, parse, and format data and then design high quality graphics that help you explore and present patterns, outliers, and relationships.
  • Presents a unique approach to visualizing and telling stories with data, from a data visualization expert and the creator of flowingdata.com, Nathan Yau
  • Offers step-by-step tutorials and practical design tips for creating statistical graphics, geographical maps, and information design to find meaning in the numbers
  • Details tools that can be used to visualize data-native graphics for the Web, such as ActionScript, Flash libraries, PHP, and JavaScript and tools to design graphics for print, such as R and Illustrator
  • Contains numerous examples and descriptions of patterns and outliers and explains how to show them
Follow the links below to learn more.


Visualize This

Saturday, February 05, 2011

Leviathan Roaring at Society

According to Ian Murray of the National Review Online, the number of Americans living off of Uncle Sam is larger than most of us might imagine:
When we add up the true size of the federal workforce — civil servants, postal workers, military personnel, contractors, grantees, and bailed-out businesses — and add in state and local government employees — civil servants, teachers, firefighters, and police officers — we reach the astonishing figure of nearly 40 million Americans employed in some way by government. That means that about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer.
The frightening sentence is the last: "...about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer." Given the extent of these numbers, one would think that an adjustment in the public sector just might be in order. In the meantime, Leviathan is roaring at society...


Source: Murray, I (2011, February 3), Leviathan, National Review Online.

Monday, August 03, 2009

In Defense of Financial Theories

I recently read a ridiculous critique of Value at Risk (VaR) by Pablo Triana in BusinessWeek (“The Risk Mirage at Goldman,” Aug 10, 2009). His review of this advanced financial technique is scathing:
VaR-based analysis of any firm's riskiness is useless. VaR lies. Big time. As a predictor of risk, it's an impostor. It should be consigned to the dustbin. Firms should stop reporting it. Analysts and regulators should stop using it.
Mr Triana bases his assertion on the observation that VaR is “a mathematical tool that simply reflects what happened to a portfolio of assets during a certain past period,” and that “the person supplying the data to the model can essentially select any dates.” My response to his argument is simply to ask, “Isn’t that true of any model or theory…?” Mr Triana goes on to argue that:
VaR models also tend to plug in weird assumptions that typically deliver unrealistically low risk numbers: the assumption, for instance, that markets follow a normal probability distribution, thus ruling out extreme events. Or that diversification in the portfolio will offset risk exposure.
In essence, Mr Triana seems to be saying that normally distributed results have bounds, and that portfolio diversification does not offset risk. Neither of his assertions are supported by probability theory or the empirical evidence. Yet, Mr Triana goes on to conclude, “it’s time to give up analytics so that real risk can be revealed.”

Mr Triana does a disservice to the financial services industry and public at large with his dramatic commentary. Yes, the discipline of finance has much to learn from the ongoing economic crisis, and of course, financial theory in general will evolve based on these recent lessons. However, just because one gets a bad meal in one restaurant does not mean that one should quit going to restaurants.

Financial theories such as VaR stand as state-of-the-art tools in the business of finance and risk management. These techniques are grounded in the same stochastic methodologies that are used by engineers in virtually every industry. To dismiss VaR so completely without considering its utility for supporting effective financial decisions is tantamount to sending financial theory back to the dark ages. Our knowledge of finance needs to advance as a result of what is happening in the economy, not go backwards.