Strata Week: Statistically speaking

Trading platforms, truth in graphs, European financial stats, and Mandelbrot's passing.

Here’s a look at the latest data news and developments that caught my eye.

Never race a penguin

The London Stock Exchange (LSE) has reportedly “doubled” their networking speed with a new Linux-based system, clocking trading times at 126 microseconds as compared to previous times of several hundred microseconds.

ComputerworldUK reports that “BATS Europe and Chi-X, two dedicated electronic rivals to the LSE, are reported to have an average latency of 250 and 175 microseconds respectively.”

The Millenium Exchange trading platform is scheduled to roll out on the LSE’s main exchange on November 1, replacing a Microsoft .Net system.

Lies, damn lies, and vertical axes

William M. Briggs took issue in his blog with a recent post of Paul Krugman’s for playing unfair tricks with the slopes of graphs by messing with the scale on the vertical axis.

Briggs asserts that starting the scale at zero is a wily way to flatten out a slope, and he’s right that it has that affect. But worse, I think, is the perception distortion that results from displaying two graphs with different scales side-by-side. Whatever scale is used, consistency is key.

Ironically, Krugman’s post was meant to call out graphical misrepresentation regarding levels of government spending. It all goes to show how much we need increased data and statistical literacy across the board.

Speaking of statistics

If you don’t believe me, ask European Central Bank (ECB) president Jean-Claude Trichet. The fifth ECB conference on statistics, originally scheduled for April but delayed by a certain Icelandic ash cloud, was rescheduled for this week. To take advantage of yesterday’s date (written in the European style, the date was twenty-ten-twenty-ten), it was declared the first World Statistics Day by the UN General Assembly. Trichet opened the conference by calling for better, more reliable statistics from all member countries.

Evidence-based decision-making in modern economies is unthinkable without statistics … The financial crisis has revealed information gaps that we have to close while also preparing ourselves for future challenges. This is best achieved through creating a wide range of economic and financial statistics that are mutually consistent, thereby eliminating contradictory signals due to measurement issues. The main aggregates must be both reliable and timely, and, in a globalised world, they should be comparable across countries and economies.

Not only did Trichet highlight the need for widespread use of accepted statistical methodologies, but he also urged the G20 to think of themselves as examples for the globalized world. Read the transcript of his speech here.

Rest in peace, Prof. Mandelbrot

I don’t wish to end on a sad note, but let’s say goodbye with much fondness and gratitude for Benoît Mandelbrot, who passed away last Thursday at the age of 85.

Mandelbrot spent most of his career at IBM, eventually becoming an IBM Fellow before moving on to teach at Yale. Mary Miller, Yale College dean, remembered Mandelbrot by saying:

He revolutionized geometry and made it possible to think about measurements and visualization of forms through an entirely new kind of geometry.

Mandelbrot is perhaps best remembered for the work he did with fractals (a term he coined). While not the first to discover them, his emphasis and research brought them into the limelight as a useful tool for understanding the world around us, including things like the movement of planets and the English shoreline.

The image below is a representation of the famous Mandelbrot Set, a mathematical set of points in the complex plane that does not simplify at any level of magnification.

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