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Math The Almighty Buck Science

Judging You By the Online Company You Keep 117

theodp writes "Network analysis uses data about your social network interactions to make assumptions and predictions about your behavior. The Economist notes the upside for companies looking to sell products. But don't forget about the downside, warns Adrian Chen, of living in a world where network analysis is used by financial firms to determine risky borrowers by looking at social ties, or by Internet businesses to determine which customers are more equal than others (nice to see Microsoft's back on the forefront of some tech!). So, did Mom envision Social Network Analytics when she gave you that you-are-the-company-you-keep lecture?"
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Judging You By the Online Company You Keep

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  • by memojuez ( 910304 ) on Sunday September 05, 2010 @11:15AM (#33481482)
    The core issue for the Housing Crisis wasn't a lack of knowledge in what the true risk was. Mortgage Brokers were knowingly take risks that were guaranteed to fail. I personally know a couple that were giving a loan with mortgage payments exceeded their monthly GROSS income. The brokerage firm purposely filed falsified documents to acquire said loan with the intent to bundle it into a derivatives package and resell. They're only care was to score a big immediate pay-off for them and the lender and not worry about the long term solvency of the actual loan itself.

    This was especially rampant in Florida which was the ramped up center for land speculation following the "2000-2002 Stock Market Crash."

  • by memojuez ( 910304 ) on Sunday September 05, 2010 @01:12PM (#33482030)
    This is true to the point that the purchaser/investor was relying on alleged good information from the derivatives seller as required to qualify for the loan in the first place. "Good Faith" between lenders so to speak. There was illegal activity going on at the lowest level of the process and definite collusion between the brokers and lenders, the initiating parties.

Trap full -- please empty.