Just a pair of top quality links I found this morning on Slashdot.
First, an article about the formula which pretty much single-handedly brought about today’s financial despair. Allow me to summarise: Evidence suggests that the quant who developed it knew the limitations of his model, but financial managers everywhere were drawn in by the simple treatment of complicated behaviour (correlation between two probabilities). This formula ended up becoming so popular that by the time things happened which it didn’t predict, everyone was screwed. Remember, it’s the managers who are responsible for the quagmire here because they went ahead and used this particular model against the advice of people in the know. Moral of the story? Study more maths. Article here.
Second, a video posted in the ensuing discussion: The Crisis of Credit, Visualised. Short and simple. Watch it.
One Comment
Hiding more files in pics…what will become of you?
Glad to read about your new digs at uni. Natsukashii!
We’ve begun vermiculture composting and will be growing our own vegetables and h-h-h-erbs on the roof and fire escape (don’t tell the cops). Will send pics. Thought of you and your own garden. Miss you!