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== Latest comic ==
 
== Latest comic ==

Revision as of 13:16, 4 October 2012


Welcome to the explain xkcd wiki! We already have Expression error: Unrecognised punctuation character ",". comic explanations!

(But there are still Expression error: Unrecognised punctuation character ",". to go. Come and add yours!)

And we are back! Sorry for the database issues! --Jeff (talk) 13:16, 4 October 2012 (UTC)

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Engineer Syllogism
The less common, even worse outcome: "3: [everyone in the financial system] WOW, where did all my money just go?"
Title text: The less common, even worse outcome: "3: [everyone in the financial system] WOW, where did all my money just go?"

Explanation

Ambox notice.png This explanation may be incomplete or incorrect: It can be improved.

A syllogism is a logical argument where two or more propositions lead to a conclusion through deductive reasoning. For example, one of the best-known syllogisms is:

  1. All men are mortal
  2. Socrates is a man
  3. Therefore, Socrates is mortal

In this comic, Cueball is an engineer who is attempting to make the following syllogism:

  1. I am good at understanding "numbers" (i.e., mathematics)
  2. The stock market is made of numbers
  3. Therefore, I am good at understanding the stock market

Since most engineers are purportedly good at math, proposition 1 seems to be true. It is also loosely true that the stock market is made of numbers, but only in the sense that every system can be given a post-hoc numeric characterization; the dynamics of the stock market are primarily human-driven. In this comic Cueball thinks that his skill at math will help him beat the stock market. Little does he know that the system can be unpredictable, so he ends up losing money as the financial instrument he's invested in loses value. This is due to the financial markets being largely controlled by humans making emotional decisions and not some calculable reason or logic. The fact that humans make emotional decisions is alluded to in the title text of 592: Drama.

Even if the propositions "I am good at understanding numbers" and "The stock market is made of numbers" were true in Cueball's interpretation, and even if the implicit premise that understanding a system's components implies understanding the system held, Cueball would still be wrong to conclude that "I am good at understanding the stock market": this would be a fallacy of the undistributed middle (with the first premise being more accurately stated as "things I'm good at understanding are made of numbers") or fallacy of composition (with the implicit third premise "if I'm good at understanding the components of a system, then I'm good at understanding the system"). The problem is that proposition 1 seems to say "I am good at understanding all math". However, the "all" is not present, so Cueball may not necessarily understand the math underlying the stock market.

This comic may also refer to the 1998 movie Pi where the main character repeats to himself several times his assumptions that the world is all numbers, and thus he, a great mathematician, should be able to predict the stock market, which is all numbers.

The title text talks of a less likely scenario in which Cueball causes everyone involved in the financial system to lose their money - i.e. a stock market crash. This could refer to a scenario in which Cueball figures out a way to extract large quantities of money from the stock market, causing a sudden, major decline in everybody else's wealth, or that his involvement has caused literally everyone, including his own, stock market assets to lose their value. This is possible since there is no conservation of value for the stock market. The value of a particular stock is determined by a majority that is willing to trade it at a given price. Alternatively, Cueball could cause a global stock market crash if he is an engineer responsible for vital stock-market-related software and/or hardware.

An example of a situation where the action of engineers was implicated in just such a crash is the 2010 Flash Crash. High-frequency quantitative trading, which relies more on financial technology engineering than sophisticated financial knowledge, was heavily involved in this particular crash. The release date of this comic makes it highly likely that it refers at least in part to the 2015 Chinese stock market crash which largely affected most other world financial markets, particularly during the week of August 24–28, during which this comic was published.

Transcript

[An white frame with text inside an underbrace and an overbrace]
An engineer
syllogism.
[Cueball is at his desk in front of his computer, with his hands on his knees, thinking.]
Cueball, thinking: 1: I am good at understanding numbers.
[Cueball takes one hand to his chin, still thinking.]
Cueball, thinking: 2: The stock market is made of numbers.
[Cueball lifts both arms from his legs, still thinking.]
Cueball, thinking: 3: Therefore I-- Wow, where did all my money just go?


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