BillB
Posts: 388
Joined: Aug. 2009
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| Quote (Learned Hand @ Dec. 19 2013,18:21) | | Quote (Soapy Sam @ Dec. 19 2013,03:00) | Super! A Lawyer Writes about the meaning(s) of 'random', 'chance', and 'random chance'! I'll pull up a chair.
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My old firm once tried a case involving a securitization of some exotic assets. (All the facts here are only alleged, the case is still pending.) One of the contested facts was whether a report about the securitization, which referred to a "Monte Carlo model," was referring to a particular model we had found in the defendants' files. The defense team said it couldn't be referring to that model, since Monte Carlo models are random and the one we found was deterministic.
Every time you hit the "simulate" button on that model, it would run thousands of scenarios and report their results. But it would run the same scenarios each time, reporting the same results, unless you changed an assumption. The fact that the scenarios were functionally randomized didn't matter, the defense argued, the fact that they don't change each time means they're deterministic and therefore not random and therefore this can't be the Monte Carlo model the report referred to.
We wound up putting on an expert witness to testify as to the theoretical nature of randomness and its application in financial modeling. She explained, patiently, that you don't want a model to return different numbers every time you run it, since you use those models to test assumptions. If the results change every time you run it, you can't tell whether those changes are down to randomness or the new assumptions. So you run one set of randomized scenarios, but you use the same seed every time so the results don't change until you start changing assumptions.
Doesn't matter, the defense said. Unless the results change every single time, it's not random. Their position was unworkable in the real world and a little silly, but it was necessary to support their case so they (appropriately, in that context) defended it with gusto.
What was interesting to me is how much trouble everyone involved in the case (other than the experts) had understanding what "random" really meant. That the results change? That they're unpredictable? That it's the result of some operation on an uncorrelated seed?
And of course, the lawyers weren't interested in the theory. We were interested in whether the experts' approach helped our case or not.
When Barry Arrington discourses about non-legal matters, he's not doing a careful analysis and looking for answers. He's finding arguments that support his case and pounding the table to support them. Consequently, he's unable or unwilling to answer detailed analyses like RB's or Dr. Liddle's. Discussion isn't the point, winning the case is the point.
Of course, in a court of law there's a structure in place to corral combative litigants and direct their adversarial energy towards an objective result. When you give that power to one of the advocates, the process predictably goes off the rails. |
Informative and insightful post of the week?
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