skepticlawyer » The problem with financial modelling - comment by Joe Cambria

I’ve worked as a trader for a while and saw my fair share of models used either for trading or valuation purposes. Trading models were basically useless as they were essentially trend following in various degrees. They made money when the trend was in full swing, but they gave all the money away when there was no trend. Valuation models to assess risk across markets arriving at a firm wide risk envelope were not only silly, they were actually quite dangerous.

Why then are we relying on models to predict climate change and adjust our way of life as a result? Are they more accurate than financial models in figuring the impact of GHGs in climate for a period of 100 years? The IPCC has handed out confidence levels of 90% as a result of models suggesting global temps will rise around 2 degrees over the next 100 years.

I highly recommend reading the link; it shows just how human minds can close down as a result of groupthink. I’m seeing speculative evidence this is also happening to climate scientists that mostly rely on models to make climate predictions.

We live in interesting times.