On 04/01/2011 1:37 PM, Rich Cooper wrote:
> Even the highly regulated escrow processes are far too idiosyncratic to be
> modified so the business geeks can take control from the technical geeks.
> If you have ever gone through escrow, and found those surprises that pop up
> when the CC&Rs restrict the purchaser in many unenforceable ways, and then
> tried to live within the CC&Rs, you will know what I mean. The "standard"
> parts are so small compared to the bulk of the data that passes through
> escrow and out the other end to purchaser, governments, seller, title
> company, insurance company and local planning staff.
> About a year ago, I worked on a case where a purchaser had flipped an
> apartment building and gotten a major markup of nearly twice the realistic
> value of the building on which to borrow the purchase money! The title
> company had missed the flip, and yet had boasted on their web site about how
> ISO 9000/9001 compliant their software was. Then they blamed the error on
> the computer!
> I was able to show that ISO 9001 compliance would have been impossible with
> a computer error like that. The bank that provided the purchase loan had
> only been given the second part of the flip, leading to them thinking that
> the apartment building had sold for only a little more than it was bought
> for a couple years ago - false information. Of course, in the real estate
> market which has really gotten screwed up in the last few years, the
> apartment building owners were unable to pay for the loan after buying the
> building, and the bank was nonplussed.
And it is nobody's interest to look too deeply into the failure or
report it up the line since the bank probably tried to securitize the
loan and sell it to a pension fund. (01)
> My point is this. The complexity and idiosyncrasies of business
> transactions are so market-, buyer- and seller-specific that the likelihood
> of predicting all the ontological columns needed to model the transactions
> is very, very low. I don't consider that a likely scenario in my lifetime.
> But then I am rather old also. Maybe after HAL gets built it will be fine.
It will be an evolving process if it happens and will be driven by
regulatory reporting requirements. (02)
If there were sensible governments in play, they would restrict the
types of transactions that could be securitized to ones that could be
accurately described and make it a criminal offence to disguise a
Not too likely given the amount of money in play and the fact that the
people losing the money were losing someone else's money (and getting
bonuses for doing it) and have enough cash to pay lobbyists to see that
the rules of the game remain unchanged. (04)
> Rich Cooper
> Rich AT EnglishLogicKernel DOT com
> 9 4 9 \ 5 2 5 - 5 7 1 2
> -----Original Message-----
> From: ontolog-forum-bounces@xxxxxxxxxxxxxxxx
> [mailto:ontolog-forum-bounces@xxxxxxxxxxxxxxxx] On Behalf Of Mike Bennett
> Sent: Tuesday, January 04, 2011 3:49 AM
> To: [ontolog-forum]
> Subject: Re: [ontolog-forum] Quote for the day
> I think you have hit the nail on the head. The financial industry
> does not lack precision. Not only simple monetary instruments
> (whose meaning is as primitive as it gets) but more complex
> financial instruments, whose meaning is grounded in contract and
> The ambiguity sets in when various technical folks get hold of
> what are originally precise terms, and shoe horn them into
> various different databases with different data structures, put
> unexpected new (but precise) terms into existing data fields that
> also house data with different meanings, then devise message
> schemes that get these from place to place, all without formal
> reference to the original, existing, precise business meanings.
> And without business review and oversight of what this data is
> becoming in the arcane world of data, because they have left it
> to the data geeks to deal with it.
> Until one day the world wakes up and realises that no-one knows
> exactly what their exposure is to anyone else.
> On 04/01/2011 02:45, John F. Sowa wrote:
>> Ron and Pat,
>> People have been defining standard terminologies and specifications
>> for many centuries before anybody taught them to use the "O" word.
>>> I would think that local conformance concerns should be addressed by
>>> extensions and processes around an internationally agreed ontology.
>>> Having an unambiguous description of goods and services crossing borders
>>> (customs, homeland security, environment, regulatory reporting, etc.)
>>> would seem to provide a clear ROI for development of ontologies.
>> Many *centuries* before computers were invented, governments and
>> international standards bodies developed standards for navigation,
>> geographical coordinates, time, units of measure, screw threads,
>> wheat grains, chemical compounds, etc. Note that the terms "Julian"
>> and "Gregorian" for dates refer to Julius Caesar and Pope Gregory.
>>> I would think that a universal description of a financial instrument
>>> would facilitate international trading of that security.
>> The Sumerians baked those financial instruments into clay tablets
>> many millennia ago. Their successors were doing international
>> trade across the Silk Road from China to Europe and Africa over
>> three millennia ago. The Phoenicians invented the alphabet to
>> keep track of all the goods they were shipping from port to
>> port around the Mediterranean to the British Isles.
>> The modern definitions were established by the Italian bankers
>> half a millennium ago. Their successors were using international
>> electronic funds transfer by telegraph for many decades before the
>> Internet came along.
>>> The point I think is worth considering is that, unless one actually
>>> has a common vocabulary to describe one's models, there is no way
>>> to tell that they are in fact different.
>> I certainly agree -- and so would Julius Caesar, Pope Gregory, and
>> lots of Sumerians, Phoenicians, and Renaissance bankers.
>> Before we try to sell them on the idea of using ontologies, we have
>> to show them some advantage. They know their business far better than
>> we do, they've been running it successfully for a long time, and we
>> need to show some clear value in this newfangled O-stuff.
>>> This suggests that the primitive elements may focus on observable
>>> phenomena, and perhaps also on mathematical or graphical primitives
>>> that can serve to build the mental models people use.
>> Look at the words 'suggests', 'may, and 'perhaps'. That sounds far
>> too speculative to convince people who have been keeping precise
>> records about billions and trillions of dollars of commerce.
>> I really hope that the work on logic and ontology can succeed.
>> But it has to do something better than what people have been
>> doing already. Vague suggestions that may perhaps do something
>> someday aren't going to convince anybody.
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