Language Is Too Clumsy an Instrument?
said Luitzen Egbertus Jan Brouwer, Dutch mathematician and philosopher, founder of the mathematical philosophy of intuitionism. This weekend I reread Dietmar Dath's Höhenrausch, Mathematics of the 20th Century in 20 brains - a collection of short stories and fictional portraits of Cantor, Hilbert, Poincaré, Brouwer, Noether, Ramanujan, Gödel, Dirac, Turing, Kolmogorow, von Neumann, Dieudonné, Grothendieck, Chaitin, Thom, Robinson, Mandelbrot, Witten, Wolfram … I am afraid, this book appears to be available in German only.
I do not want to dive into the battle between formalists (Hilbert) and intuitionists (Brouwers). It is clear now, that the borders are not even grey but moving (Douglas Hoftstadter). And they changed drastically, when thinking about computation and computational knowledge.
What came to my mind: term sheets of financial instruments. They are often 120 pages thick although the essence about return expectations and risk are concentrated in a few lines.
It is one of the tasks of quants to identify the essential information and replicate it in an external valuation and risk management (two sides of the quant business that must be treated with equal sophistication from the beginning) system finding out more about the possible behavior of the deal. And they need to screen the total context searching for limitations, contradiction, …
It is my strong belief, that term sheets could be described in a declarative language that is understandable and computational. This would help to minimize misunderstandings between the sell and the buy side. Help to explain complex financial behavior to non experts. It would also follow the old idea of document centered representations of programs.
This is what we do: we read tons of term sheets, generalize and transform them into programs in our UnRisk language. So, for all deal types covered by UnRisk we have such a unified language representation, interpreted by the UnRisk computational kernels. UnRisk documentation and help is built of such document centered programs.
This is how it is used.
Picture from sehfelder