Wired Magazine reports that a formula devised by mathematician David X. Li to evaluate risk was used by all the major financial players – who are now broke and begging for government handouts (a.k.a. welfare), is responsible for the current financial melt down.
True or False? Hmm … I’ll go with False. I’d say the root cause was herding behavior – they all did the same thing at the same time. And when reality emerged, all that “wealth” was revealed to an hallucination such as “House prices always go up”. Until they don’t.