Chelsea

JP Morgan, MENSA Porn & The England Team. Oh Yes.

You don’t have to think too far back to remember the blissfully hedonistic days of a world ostensibly devoid of financial anxiety. The world’s population happily bought and sold gingerbread houses and indivisible candy-cane stocks and shares with mythical chocolate money.

And then BOOM. Moneygeddon. No one had remembered to ask whether the gumdrop tree was Fair Trade.

Since then, banks have attempted various superfluous rapprochements with the general public. The latest PR stunt coming from financial servicers JP Morgan is their calculation, using common Quantitive Models that predict upcoming trade opportunities, that Rooney, Defoe, Gerrard, Cole and Barry are all mathematically destined to be crowned world champions this summer.

The prediction, as Morgan admit themselves, should be taken with a pinch of salt; but their calculations do underline how vastly complex the current economic model is and their outcome – a victorious England – implies that, really, banks haven’t got a f****** clue what they’re doing.

The Quant Model Morgan utilise reads like MENSA pornography. Essentially, they have combined four sums of variables which in turn have two calculations each to reach a number that marks a teams probability of winning the coveted trophy.

So far so wha-? But, sensibly, the variables they use aren’t plucked from thin air. Morgan has included the team’s FIFA World Ranking, team form, pricing trends from bookmakers, team success ratios and historical success. Each of which are, somewhat, arbitrarily quantified as a certain percentage of the total probability sum – but, hey, when has random quantifications ever done any wrong to the banking system…

Not happy with just finding the numerical probability of a team’s success – which, incidentally, shockingly places Brazil and Spain at the top of the table – Morgan then intriguingly apply the model to the tournament’s predesigned layout and assign a group to each team based on their probability – Spain and Brazil, for example, are in group 8, while Japan (yes, Japan) and Korea are in group 1. They then play out the tournament with the highest group winning each tie; it’s kind’a like Top Trumps but with just one number to compare.

We’ll put the information download on hold a minute, because already there are some interesting results: Germany, despite their notorious efficacy at World Cup finals are ranked in group 6 – a group which is also home to the Ivory Coast and, amazingly, Chile. As a result, they get comfortably knocked out by Slovenia (group 7) in the last 16. Ok, it could happen, but it’s hard to see why Germany are at such a disadvantage – the Germans had no problems in qualifying and they typically managed to march into the semi-finals at the last World Cup.

But here is where the model truly begins to fall apart: According to Morgan, England are good at penalties. In fact, they are the best in the world. The model even predicts that Capello’s (not so) charismatic company will beat Spain in the final on penalties. And before that, the Dutch. No wonder the banks are in disarray. Here’s how: Morgan decided that the stalemate between two similarly grouped teams in the knock-out stages would be answered by yet another equation.

Defying logic altogether, Morgan chose for this equation to be determined by combining scoring ability and goalkeeping ability, neither of which have much of an impact on the outcome of a shoot-out and it ultimately flaws their entire model. It’s a decent attempt by Morgan, but their efforts illustrate just how practically impossible it is to apply a formula or statistics to football with a total disregard for the unquantifiable human element – it equally demonstrates how worryingly precarious the sums are that decide an economic fate.

For football, statistics have already been proven as an untrustworthy aid. From the 50’s to the early 80’s, football theorist Charles Reep used statistics to prove the effectiveness of the long ball. His findings were in total ignorance of the quality of the free-flowing passing teams of the 70’s such as Pele’s Brazil and Cruyff’s Netherlands.

Resultantly, Reep’s beliefs and the illusory power of numbers severely hindered the advancement of English football during this period.

His theories have since been completely debunked. It’s just as well then that JP Morgan’s model comes with a significant disclaimer.

Follow me on Twitter: http://twitter.com/kyl3jackson

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