Are Mathematical Models the Cause for Financial Crisis in the Global Economy?
HTML-код
- Опубликовано: 6 июн 2024
- Andrew W. Lo, director of the Massachusetts Institute of Technologys Laboratory for Financial Engineering, breaks down the hot debate brewing about the cause of the current financial crisis. Learn the arguments for and against the claim that complex financial securities and the mathematical models used to manage them should take the blame. Was it systematically programmed or just human nature?
![Rich Dunk (Ft. DaBaby) - BIG DAWG [Official Video]](http://i.ytimg.com/vi/Pz2ewsSKAEM/mqdefault.jpg)
Andrew Lo is by far best teacher in finance- he is blessed by unique capability to make complex stuff simple.....
I was in a pub in Donegal Town talking to my niece's husband (he's a maths professor) and for small talk we were discussing "the random walk" his and mine; "the Central Limit Theorem" and "the Gaussian Normal Distribution Curve" which is derived from the CLT. I claimed that the Gaussian curve is nowhere as accurate as Merton and Scholes claim; and in reality only less than 30%, from practical experience. Friedman validated the B-S formula and a massive flood of derivatives was unleashed.
That was a very clear explanation. Thanks for posting this lecture.
Excellent Demonstration on many levels. Well done Dr. Lo
Awesome demonstration
Amazing!
Excellent explanation of securitization... You can start at 15.00...
It!’s a genuine explanation
Never considered "normal accidents" a part the financial crisis before. Easy to see how efficiency and the race to the bottom (profit) affect safety in othe other industries. Be efficient at cutting waste until there is an accident. Competitors narrow profit margins and organisational momentum remove safer long term options.
Note at 36:00 "Thought experiment."
love the salad comment. Timing is everything!
Note at 28:00 min
The most important things in a model are those it doesn't contain.
Prof. Lo barely scratched the surface with his presentation. Risk doesn't seem to be his strong point which is understandable since he is for the most part a mathematical economist, not an epistemologist of risk and uncertainty. If there is anyone who delved profoundly into the risk and uncertainty space, it is the author of the Black Swan, Nassim Nicholas Taleb. Taleb has trashed the entire field of mathematical finance, its formulas and equations including the most famous one, the Black-Scholes Equation.
A very good start; it had to be the Accountants to blame as they must have OK.ed the accounts and it's time one of these big accounting firms was blamed and dissolved (pour encourager les autres) as they used to say. Mr Lo is completely wrong by blaming the wrong people Is Mr Lo not the Cupola Man? Does he know the difference between a Gaussian Normal Distribution Curve and a Probability Curve? This is a serious question and not a joke. Does he know that he is betting all we have in a casino?
The cupola man was D. Li.
The level of financial mathematics taught in American Universities is worse than appalling.
Do you know that American mathematicians can't divide the "time zones" Yesterday; Today; and Tomorrow into their time zones using the necessary 4 Cartesian co-ordinates and put t(zero) in its correct position. I can't believe this; but they have been doing incorrectly for the last 44 years
SAY'S LAW
Unless your math model is a perfect mimic of the complex reality, I'll always contest your assumptions
No. :-)
Your correct; but I was nearly correct and he is Chinese.
"real number system for accounting fraud". please dont represent money as a real number, use a fixed point number instead. i think i found the flaw.