Friday, August 22, 2008
Using tag clouds to understand the Fed
Fed Chairmen are famously difficult to understand. Even Ben Bernanke, who is apparently clearer than his predecessor, choreographs his rhetoric into a dance that traders then try to deconstruct. Perhaps technology can help. Paul Kedrosky generated a "tag cloud" from Bernanke's speeches and thinks he learned something.
This strikes me as a technique that might actually work right up until the moment somebody on the Fed staff teaches Ben to game the tag cloud software.
1 Comments:
By 
Ray, at
Sat Aug 23, 07:38:00 AM:
I think your ability to game something like this without making your speeches silly and awkward (or intentionally misleading) is probably quite limited.
Vague speech is susceptible to precisely this sort of analysis; there was a great vignette in Foundation, when Salvor Hardin performs such an analysis on an Imperial diplomat.
The best way to prevent this sort of thing, is not to say anything at all :)
