Sunday, August 30, 2009

Forex Genome Project

Pandora has created a ‘Music Genome Project ’ that tracks what songs you like and creates suggestions, a quasi form of Artificial Intelligence . Although Pandora does not disclose what it’s algorithm is, Wikipedia states:

The Music Genome Project, created in January 2000, is an effort founded by Will Glaser, Jon Kraft, and Tim Westergren to "capture the essence of music at the fundamental level" using almost 400 attributes to describe songs and a complex mathematical algorithm to organize them. The company Savage Beast Technologies was formed to run the project.

A given song is represented by a vector (a list of attributes) containing approximately 150 "genes" (analogous to trait-determining genes for organisms in the field of genetics). Each gene corresponds to a characteristic of the music, for example, gender of lead vocalist, level of distortion on the electric guitar, type of background vocals, etc. Rock and pop songs have 150 genes, rap songs have 350, and jazz songs have approximately 400. Other genres of music, such as world and classical music, have 300–500 genes. The system depends on a sufficient number of genes to render useful results. Each gene is assigned a number between 1 and 5, in half-integer increments.



To create a song's genome, it is analyzed by a musician in a process that takes 20 to 30 minutes per song. Ten percent of songs are analyzed by more than one technician to ensure conformity with the standards, i.e., reliability.

The technology is currently used by Pandora to play music for Internet users based on their preferences. Because of licensing restrictions, Pandora is available only to users whose location is reported to be in the USA by Pandora's geolocation software.[2]

While this is compelling, it could be argued that the application in Music is not necessary. For example, if you choose the wrong CD it’s not a life or death situation; there isn’t any monetary or material punishment (aside from angry listeners possibly throwing things at you). Make a poor decision in the markets, and entire counties budgets are wiped out.

For example, in 1994 the County of Orange County declared bankruptcy due to suffering $1.6 Billion in losses on interest rate derivatives .

Would a genome project have a more tangible economic (and thus overall) benefit if used for Forex? Imagine a system that instead of determining for the user what type of music they like to listen to, it could determine what kind of investment to implement on your account?

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