Opinion

Emanuel Derman

Intuition, initial and final

Emanuel Derman
Oct 28, 2011 13:28 UTC

I had dinner with Kahneman once a few months ago, and have now been dipping into his deep and thoughtful book Thinking, Fast and Slow.

Though I haven’t read all of it, I begin to realize that though he and I both sometimes use the word intuition, we are talking about different qualities.

For Kahneman, I think, intuition is fast thinking, snap judgements,  attractive because they avoid hard rational thinking of the second kind. As a result, it’s riddled with biases and mistakes which are interesting to psychologists.

But I once was a physicist and I’m still interested in the mysteries of nature, and so I use the word intuition in another sense. I like to think I’ve had a few occasional intuitions that were correct in small ways about small things while doing research, so I’m talking from experience. When they were right, they were the result of long hard exhausting preliminary rational struggles, banging one’s mind against the object of one’s attention. Then, finally, once in a few years, came an insight or idea or intuition, after all the struggle, that still had to elaborated by further rational effort. That’s what I call intuition.

Kahneman’s and mine are both legitimate uses of the word, but different ones.

OS Moi

Emanuel Derman
Oct 27, 2011 17:55 UTC

Someone directed me to this remark by Larry Page: “DNA is about 600 megabytes compressed making it smaller than any modern operating system like Linux or Windows.”

I’m a firm believer in logic. Therefore Either my programmer is much better than the 1000s of people who created Windows; or My hardware is much better than Intel’s; or Both of the above.

Linux, I’m not so sure about.

Maybe markets need more principles and less regulation

Emanuel Derman
Oct 21, 2011 13:30 UTC

What follows are some remarks I intend to make on Friday Oct 21 2011 at a panel on global risk organized by GARP and the Federal Reserve Bank of New York. Introduction

I have the luxury of not being a regulator, which I think is a very difficult job. I used to be a physicist, and Nature doesn’t care about regulations; she cares about principles. (If you tried to regulate the motions of the planets you would have a very hard time: turn here, Earth, not too fast, spin more slowly, watch out for the moon, etc. Instead, a few principles of Newton’s take care of everything.) Therefore I’m more partial to principles than regulations, and so I’m going to take the luxury of talking about principles of modeling and the principles of capitalism that, if respected, might mitigate the need for so many regulations.

What I say is based on direct experience of building models in physics and also building and using models at Goldman and Salomon on various derivatives desks, and then at Goldman in Firmwide Risk.

The Tides on the Ides at Times Square

Emanuel Derman
Oct 17, 2011 14:43 UTC
The Tides

The sun’s gravity pulls at all parts of the planet, and the bits of earth closer to the sun get pulled harder than the bits farther away.

This gradient in the force on the earth tries to tear it apart, atom from atom, but as long as the earth is far from the sun the gradient is not too steep, and the stronger mutual attraction between bits of the earth keeps it intact.

The moon causes a similar gradient that produces the tides. Water on earth nearer the moon bulges towards it as the earth rotates; the center of the earth is pulled towards the moon too, and the water on the opposite side remains a little behind. So you get two tides a day. Spring tides occur when the moon and sun line up and act in unison on the earth.

“A bang or two”

Emanuel Derman
Oct 14, 2011 14:55 UTC

This is an extended version of a review I wrote on Amazon for Lucky Bruce: A Memoir (Hardcover) Terrifically Charming, Funny, Insightful, Interesting Mix of Braggadocio and Self-Deprecation

Many years ago I read “A Mother’s Kisses” and laughed out loud. The only other books I ever did that with were Kingsley Amis’s “Lucky Jim” and Donleavy’s “The Unexpurgated Code: A Complete Manual of Survival and Manners.”

The latter is devilishly funny. “Lucky Jim” is funny and rebellious but also perceptive. “A Mother’s Kisses” is funny too, but much more insightful about adolescence, about trying to grow up and break away from parental ties and from a fascinating womanly but ultimately suffocating mother whom he’s loyal to.

Why I’m right

Emanuel Derman
Oct 12, 2011 15:31 UTC

This article about Raymond Tallis, whom I’ve never heard of, strikes a chord with me because it’s related to a post I wrote recently on this blog, as follows:

In an article on nightmares in the WSJ of Oct 4, there was the following paragraph:

Modern psychiatrists, led by Allan Hobson of Harvard Medical School, believe dreams are electrical pulses from the brain stem randomly bombarding the center of the brain where visual memories are stored, creating kaleidoscopes of images around which the brain concocts stories.

Trials and tribulations

Emanuel Derman
Oct 10, 2011 13:01 UTC

A very short video account of amazing but true things that can actually go wrong when you publish a book:

Two things that don’t remind me of Steve Jobs

Emanuel Derman
Oct 7, 2011 20:44 UTC

1. In this country politicians use polls to try to figure out what people want, and then offer it to them in order to get elected.

2. In the social sciences and even in some of the hard sciences, you can often only get tenure if you publish in the sanctioned journals in the sanctioned style.

 

The dangerous method

Emanuel Derman
Oct 7, 2011 14:33 UTC

I went to the NY Film Festival for the first time in years last night and saw David Cronenberg’s A Dangerous Method, a movie about the interactions between Jung, Freud, and Sabina Spielrein who was Jung’s mistress, Jung and Freud’s joint patient sequentially, and an eventual analyst herself.

It was consistently absorbing, but I wouldn’t say more than that.

What I did find thought-provoking was its recreation of the impact of psychoanalysis as a technique. I got a glimpse of how revolutionary it must have seemed, not just because of its focus on infantile sexuality, but even more so because of its use of what they refer to as the dangerous method, by which they mean the talking cure, the idea that you can treat what appears to be an organic or seized-by-spirits illness by words, by access to the mind through its natural outputs. (I suppose in a way it isn’t that different from putting spells on people, and therefore not that new really. Yuri Manin in one of his books refers to the fact that hypnosis is impossible without the invention of language.)

According to Spinoza, to whom I devote a chapter in my book Models.Behaving.Badly, everything in the universe has a Thought attribute and an Extension attribute, i.e. a mental and physical side. Our temptation these days is to give major weight to the physical and regard the mental as a byproduct. But Spinoza thought (and I like the idea) that the two were but complementary sides (and there are more than two, he insisted) of the same underlying thing, and that one aspect can’t explain the other.

I Had a Dream

Emanuel Derman
Oct 4, 2011 19:16 UTC

In this article on nightmares in the WSJ, there is the following paragraph:

Modern psychiatrists, led by Allan Hobson of Harvard Medical School, believe dreams are electrical pulses from the brain stem randomly bombarding the center of the brain where visual memories are stored, creating kaleidoscopes of images around which the brain concocts stories.

Here is the same paragraph, with one word changed:

Modern psychiatrists, led by Allan Hobson of Harvard Medical School, believe thoughts are electrical pulses from the brain stem randomly bombarding the center of the brain where visual memories are stored, creating kaleidoscopes of images around which the brain concocts stories.

Does that count as an explanation?

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