PERFECTLY UNPREDICTABLE:
WHY FORECASTING PRODUCES USEFUL RUBBISH  Professor Michael Mainelli

- 1. Forecasting helps us be more efficient 

COASTAL MAPS
They found that when drawing coastal outlines on a computer you could try to spot key points and traditionally draw a curve betwen them. But they found when you zoom in  the shapes didn't look right it  looks super jaggy. 
- They found an algorithm to reduce the number of points without affecting the shape or 'feel' of the line.

However  when you zoom out the lines look too simple so they started to put exra points in to make it look jagged, but this is inaccurate. They found they could use Mandelbrot's  fractals to get a good effect. When you vary the fractal dimension with the zoom then it looks very realistic. However if you try to use it at a detailed level the map is quite different from reality. 

FORECASTING 
- Forecasting is similar : guessing which way lines are going to go in the future.

hang on a mo they don't use any mathematical formula for filling in the gaps they just use a fractal which looks right. Is he saying you could do the same with forecasting ?

- arm raising exercise to show humans can easily generate predictions based on analysis of past patterns 

- Indeed, forecasting and prediction are central to the scientific method.

'The only function of economic forecasting is to make astrology look respectable.' 

- However expensive  complex forecasting is usually crap and simple models are often better
- Research suggests that human evolutionarily developed guessing mechanisms may be quite sophisticated, and adequate for many purposes. 

- you come up with better solutions by testing them, but in government/business 
people don't allow time to do this they hurry to pick an off the shelf guru solution.

The rules for successful forecasters include, 'ideally, predict the past', 'make lots of predictions', 'predict a figure or a date, but never both', 'shout about your successes', 'leave town if your failures catch up with you'.

Before we used to come up wirh  single precise number predictions, today Probabilistic forecasts are more common and better understood :  'fan chart' of possibilities like BoE uses.

- Instead of using one model we run different ones side by side.

- talks on media speculation feeding back into reality .

Of course, true winners ignore all forecasts.  'Champions know that success is inevitable; that there is no such thing as failure, only feedback.  They know that the best way to forecast the future is to create it.'