Advanced analytical models, with Dr Joseph Breeden (Deep Future Analytics)
How to Lend Money to Strangers
Brendan le Grange
5 • 2.6K Ratings
🗓️ 31 August 2023
⏱️ 31 minutes
🧾️ Download transcript
Summary
Dr Joseph Breeden is an entrepreneur and a researcher. or perhaps I should describe him as an entrepreneur and a discoverer, so keen is his curiosity. And, with 30 years spent at the sharp point of credit analytics innovation, he is also a fantastic speaker on some of the most important topics of the day: machine learning, AI, and managing economic cycles among others. In fact, just yesterday, he delivered a phenomenal keynote address on the topics at the Credit Scoring and Credit Control Conference in Edinburgh.
I was there, but if you weren't, don't worry, we have those insights and more on today's episode of HTLMTS.
Deep Future Analytics is at home on the internet at: https://deepfutureanalytics.com/
Joseph himself can be found on LinkedIn, https://www.linkedin.com/in/josephlbreeden/, or, if it is his research you're after, the root to all of that starts here: https://www.researchgate.net/profile/Joseph-Breeden
Not content with just that, Jospeh is also the associate editor of two journals you may want to add to your reading list: https://www.risk.net/journal-of-risk-model-validation and https://www.risk.net/journal-of-credit-risk
Oh, and his work on forecasting the auction prices of fine wine can be found here: https://auctionforecast.com/
As mentioned, yesterday saw Joseph on the stage at a packed Credit Scoring and Credit Control Conference in Edinburgh, delivering the opening keynote. It's an exceptional event for those in the industry and while you're busy missing this year's edition, it will be back in two years https://www.crc.business-school.ed.ac.uk/conferences
You can also find and follow me on LinkedIn (or connect) at: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=brendanlegrange
Otherwise, my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24
If you have any feedback or questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.
Regards, Brendan
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Transcript
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| 0:00.0 | There's a reason people make fun of the ability of economists to predict a future. |
| 0:05.6 | It's practically impossible because any tiny predictor session, there are government agencies |
| 0:11.6 | working very hard, not just to prove your forecast is wrong, but to make your forecast |
| 0:15.4 | wrong. |
| 0:16.4 | That's the Fed's job is to prevent that recession you might be predicting. |
| 0:19.6 | But stress testing models can be very valuable, and in fact, in 2010 and 11, especially |
| 0:26.8 | the smaller lenders were still setting their loss reserves based on the losses they experienced |
| 0:31.0 | in 2009. |
| 0:32.4 | And the economy was already improving. |
| 0:34.4 | The arrow on unemployment was down. |
| 0:36.8 | They should have been pricing for an improving economy, but they were pricing for the economy |
| 0:40.6 | they just lived through. |
| 0:42.3 | Model risk management was basically created after the 2009 crisis, somebody said, well, |
| 0:47.9 | we must have been using a bunch of bad models. |
| 0:49.8 | We got to have a process, right? |
| 0:51.4 | Okay. |
| 0:52.4 | So you're playing catch-up, and you put in a basic process. |
| 0:55.0 | And then machine learning models start to get used. |
| 0:58.6 | And there again, we're trying to figure out how we're going to catch up from a model |
| 1:03.4 | validation perspective. |
| 1:05.4 | Now we're getting into generative AI, and we can dismiss them as not very good yet. |
| 1:11.1 | But before we know it, there'll be one show up that is good. |
... |
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