News for hackers. Stuff that matters.
Re:All the Texts on Financial Engineering You Could Ever Want by tmdg on Thursday February 26, 2009 @03:56PM (#496407)
I think that's a main issue. Many of these models are based on math that few people understand. I don't think it necessarily is an issue of integrity, but more an issue of traders and asset managers using the results of these mathematical models without fully understanding the implications and risks. They are, after all, probabilistic models and it seems like they weren't treated as such.
Re:All the Texts on Financial Engineering You Could Ever Want by nazgulnarsil on Thursday February 26, 2009 @05:09PM (#496514)
exactly, people were just saying "well the model says it will work", and didn't realize that the models they were using had huge assumptions hard coded into them.