The Baseline Scenario

Science is probably the least scary thing that an Excel bug can affect. JPMorgan Chase's "London Whale" venture lost $2 billion in part because spreadsheet modelers divided by a sum instead of an average to get a value at risk. https://baselinescenario.com/2013/02/09/the-importance-of-excel/ Then there was the infamous Reinhart-Rogoff paper in economics, used to justify harmful austerity policies worldwide post-2008, that came to false conclusions using a row formula that wasn't updated. https://www.washingtonpost.com/news/wonk/wp/2013/04/16/is-the-best-evi…

Two I have visited in the past: Economics: Baseline Scenario: http://baselinescenario.com/ Asian History: Frog in a Well: http://www.froginawell.net/

If you want a lot more beef, read 13 Bankers by Simon Johnson and James Kwak, or check out their blog, The Baseline Scenario. http://baselinescenario.com/

People need to understand what "insurance" really means. Unless you're 65 or over, you do NOT have health insurance in the US right now. You may think you do, but you don't. Good reading: http://baselinescenario.com/2009/08/05/you-do-not-have-health-insuranc…

I enjoyed the article. I also enjoyed looking through their blog (which is mentioned at the bottom of the article pages). It seems like a good place to get an easy to understand analysis of the banking crisis news. http://baselinescenario.com/

I work with an army of very smart people who need to build incredibly complex models to drive our business. Like most companies, we turn to Excel. It's the only widely used application with a low enough barrier to entry that "non-technical" people can build legitimately complex (if not always robust) models. But the problems with Excel and general spreadsheet modeling limitations offer such a great opportunity for improvement that would impact just about every business out there. I wish I saw more people tackling this, or I had a great idea to do it myself. The problems I see are around barrier to entry, in that it must be usable in just a couple minutes, simple enough for non-programmers to learn, and equally or more efficient to get a basic model functioning. Otherwise I just don't see wide adoption despite possible maintenance, accuracy, and reliability benefits. James Kwak has written some smart stuff about this (http://baselinescenario.com/2013/04/18/more-bad-excel/), and I'm interested in what Data Nitro (datanitro.com) is doing.

How quickly we forget:https://baselinescenario.com/2010/03/17/mario-draghi-and-goldman-sachs…

There are several vendors out there selling version control for spreadsheets like pathio, Finsbury Solutions. IMHO the problem is that devs know the value of version control, but it's a hard sell to the busy end users building sheets who see only barriers and controls. I believe unit testing for spreadsheets could eliminate the kind of errors that we saw in the London Whale spreadsheet [1]. SpreadServe's Python API enables you to build spreadsheet unit tests. I really should get round to posting some sample sheet unit tests on github. [1] https://baselinescenario.com/2013/02/09/the-importance-of-excel/

Not even just ignoring large chunks of the country, but actively arguing that their problems don't exist and that anyone who thinks otherwise is just making excuses for racism: https://baselinescenario.com/2016/10/17/you-cant-get-there-from-here/

Yup. Regulatory capture: https://en.wikipedia.org/wiki/Regulatory_capture Cultural capture: https://baselinescenario.com/2016/04/22/cultural-capture-in-black-and-… The revolving door between government and the private sector: http://dealbook.nytimes.com/2013/11/11/slowing-the-revolving-door-betw…

Except the useful value of gold is probably around 1% of its market value, and when we start mining asteroids (http://baselinescenario.com/2011/09/23/the-price-of-gold-in-the-year-2… ) that market value will plummet.

The baseline scenario had another similar take. http://baselinescenario.com/2012/03/21/jobs-disaster-looms/ I disagree with both, are people going to scammed? Sure. Did Madoff scam a bunch of rich "intelligent" investors? Damn straight. I personally fall on the line of personal freedom with reasonable safety nets, to me that is, allowing micro-loans, but continuing social security.

There's also Simon Johnson's '13 Banks', which, frankly, is a better read than any of these. Be sure to check out his blog - on which he writes a good summary of the financial crisis: http://baselinescenario.com/financial-crisis-for-beginners/

Excel is/was a popular tool at the highest level in various industries, including finance. A frequently shared anecdote: https://baselinescenario.com/2013/02/09/the-importance-of-excel/ > JPMorgan’s Chief Investment Office needed a new value-at-risk (VaR) model for the synthetic credit portfolio (the one that blew up) and assigned a quantitative whiz (“a London-based quantitative expert, mathematician and model developer” who previously worked at a company that built analytical models) to create it. The new model “operated through a series of Excel spreadsheets, which had to be completed manually, by a process of copying and pasting data from one spreadsheet to another.” The internal Model Review Group identified this problem as well as a few others, but approved the model, while saying that it should be automated and another significant flaw should be fixed.* After the London Whale trade blew up, the Model Review Group discovered that the model had not been automated and found several other errors...

Ah it's good to see that the colossal mistake of historic proportions (http://baselinescenario.com/2012/03/19/a-colossal-mistake-of-historic-… Just Open Bucket Shops (JOBS - http://www.nytimes.com/2012/03/15/opinion/collins-the-senate-overachie… act is in full swing and that the exploiters of it are already out there having at it with gusto. I'd like to propose a toast to the forthcoming increase in financial fraud, cost of capital and stupidity. Can I get a hip-hip-hooray for a reduction in investor protection? More seriously, this entire situation feels eerily similar to the repeal of Glass-Steagall protections with GLBA back in 1999 (https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act). The negative effects will take a decade or so to be felt, but felt they will be. It's probably hard for people to see it now, but this really is dodgy as hell. Here's to another bubble.

Stepping back for a moment, this thorough debunking of Reinhart and Rogoff's flawed paper means that now there is NO evidence that government debt exceeding 90% of GDP somehow negatively impacts growth. Let me repeat that: there is NO EVIDENCE that more government debt causes slower economic growth -- just theories. I wonder what all the government deficit scaremongers will say to this! -- PS. For reference, the often-cited paper by Reinhart and Rogoff can be downloaded at http://www.nber.org/papers/w15639.pdf and the new paper debunking it can be downloaded at http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_… -- PS#2. An Excel typo was partly to blame for Reinhart and Rogoff's errors! Reminds me of the Excel typo that allowed the "London Whale" silently to rack up billions of dollars in unexpected losses at JP Morgan: http://baselinescenario.com/2013/02/09/the-importance-of-excel/

Well, all your concerns may very well be provably correct, from a purely academic perspective. I just think the question you keep missing is: Does it matter in practice? Our entire world runs on imperfect systems. Can we really already tell whether bitcoin is worse? Where is your mathematical proof that the current monetary system is secure against polynomial time attacks? Where is your rigorous security definition for the current monetary system? Could it be we are witnessing attacks on the current system right now, resulting in enormous concentrations of wealth through interactions that we barely understand[1]? Could it be we are witnessing the authorities abuse the current system to cut off organizations like Wikileaks[2]? You seem to demand a system that is perfect in every sense on day 1 and replaces the US Dollar on day 2. Yet couldn't it be that it is actually the academic imperfections, the pragmatic approach of bitcoin that make it a success? Who knows whether airtight mathematical security is even the most important requirement? Perhaps the known attacks are "hard enough" already, or will be after a few more patches? Perhaps bitcoin will fail spectacularly in a few years due to scalability instead of security issues? My point is: We simply don't know. We have no precedent, nothing even remotely close (please correct me if I'm missing it, I honestly can't think of one). Thus I disagree the case is nearly as clear cut as you make it out to be. [1]…

There's a name for this product space! "Spreadsheet controls" describes the product space inhabited by various products that aim to help businesses manage the terrifying, complex Excel workbooks whose contents influence business decisions in subtle, interrelated ways. Microsoft recognized that this was an important hole in the way enterprises used Excel, which is why they acquired a company in this space, Prodiance, in 2011. Office 2013 integrates some but not all of the company's products in its "enterprise risk management" / "spreadsheet controls" functionality; see some discussion at http://blogs.office.com/b/microsoft-excel/archive/2012/09/13/introduci… . It was really interesting to read the prior blog post on this topic ( http://baselinescenario.com/2013/02/09/the-importance-of-excel/ ) because it sounded so familiar! That blog post is spiritually identical to about the first third of the Prodiance sales pitch. The "controls" space has a surprising amount of depth. Just a few problems that these folks think about: (1) Excel spreadsheets are not a very good computation engine: business logic can be subtly altered by a typo that includes one too few lines in a range or a copy-paste error that accidentally includes a constant instead of a calculated cell. It turns out to be possible to programmatically inspect a workbook for "risky" or "possibly wrong" calculations and warn on their presence. (2) Chained dependencies can be…

Wait a minute: you say that our expenses versus income is too high, but then also say that higher taxes won't solve anything? Unless you're arguing that higher taxes won't increase government income (which is a totally specious argument that people make all the time, but which isn't backed up in the least by any actual historical analyses), then higher taxes absolutely could solve the deficit problem. Federal tax revenues as a share of overall GDP are historically low right now, and merely letting the Bush tax cuts expire for good would solve almost all of the "deficit crisis." For example see http://economix.blogs.nytimes.com/2011/07/26/are-the-bush-tax-cuts-the… or http://baselinescenario.com/2011/10/03/how-big-is-the-long-term-debt-p… So I guess it depends on what problem you want to solve, but if you're worried about the federal deficit, then higher taxes (even in the form of just eliminating the bush tax cuts) will absolutely help to solve that problem.

I highly disagree. To argue that articles like this have a macro effect on the economy (short term) is categorically false. If we want to focus on economic recovery as a function of consumer spending then we really can't zero in on a strong correlation between magazine articles and how the public feels about the economy without the data to back that up. Furthermore, it is absolutely essential that everyone learns more about the current recession and are realistic about a recovery. http://baselinescenario.com/2009/05/25/recession-and-recovery-how-long… I would in fact argue that economic education for the public helps the economy, because if more people are educated on the many factors that contributed to the current recession (negative U.S. savings rate being one major one) then they now have the knowledge to change their actions. On a wide scale (larger percentage of people saving more) this would have a net positive effect on the economy.