Ignorantium
More reactive than flourine. Funnier than boron.
Data Tags: The Cure to What Ails us?
Categories: politics

Sunrise on Wall StreetA year plus into a recession caused by a banking near-meltdown and those charged with regulating and legislating are still looking at the issue as a regulatory or legislative problem. To the man with a hammer, every problem is a nail. Watching news on Connecticut Senator Chris Dodd’s new bill to increase Wall Street regulation reminded me of a post I wrote about a year ago regarding a Wired story. It still makes sense. Enjoy….

This story from Wired is the kind of story that could make me totally get my geek on. Unfortunately, it would seriously drive away a number of people. It’s about tagging financial data so that the reams of data churned out by public companies in their filings can be made more usable by regulators, analysts and investors. Here’s the crux:

The revolution[in financial reporting] will be powered by data, which should be unshackled from the pages of regulatory filings and made more flexible and useful. We must require public companies and all financial firms to report more granular data online—and in real time, not just quarterly—uniformly tagged and exportable into any spreadsheet, database, widget, or Web page. The era of sunlight has to give way to the era of pixelization; only when we give everyone the tools to see each point of data will the picture become clear. Just as epidemiologists crunch massive data sets to predict disease outbreaks, so will investors parse the trove of publicly available financial information to foresee the next economic disasters and opportunities.

That paragraph is pure poetry. If this is the way we’re moving in financial reporting and oversight, I’m excited. I wonder, however, if that will happen given the prevailing mood in DC. This type of attitude may lead almost inexorably to less regulatory oversight, not more. After all, if you make everything easily accessible and understandable, you get things like food labels. You get the FDA, not the FBI. That’s not what “the people,” or at least the politicians who purport to do their bidding, believe is necessary right now. They don’t want smarter ways to churn through data, they want more people at the SEC with stronger mandates to do something, anything.

Read the article. It’s actually very well written and will not make your eyes glaze. I promise.

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