I’ve ranted about this before, but just as always happens when any high profile event is on everyone’s radar, the analysts are out in force ushering in a statistical amateur hour.
The next bank that ups their “probability of a Greek default” DEFCON status or “chance of Greece leaving the euro” headline should have to endure a run on their reserves of epic proportions. I want Citigroups’s end of day balance to go to -$250MM for daring to front such nonsense today, telling me that Greece has a 50/50 chance of bucking the EU.
How did they measure that? Maybe they used that awesome history they have of all the other times that Greece has left the EU? Or perhaps they counted the faces of dishonest Greek finance ministers against honest ones, and came up with a more classical probability?
This is nuts. Nobody knows for sure what is going to happen, so these guys are trying to disguise that by dropping a guess. But the guess is meaningless, because either Greece eventually leaves, or it doesn’t.
Rather than hiding behind these numbers, which I know are being pulled out of thin air, these commentators should just take a chance, venture a guess about how things ultimately play out, and put their reputation on the table. Or stop throwing out indeterminable numbers parading as science. Either one, really.
Comments »
