From	To
Email: * First Name: Last Name: Send a copy to myself	Email: * First Name: Last Name:

Commentary Topic from greenfaucet

Greenspan: Don't Blame The Nobel-Winning Models

I caught about 30 seconds of Greenspan's grilling on the Hill today, but it was a priceless half-minute.  He was responding to some politician's question about risk and derivatives on Wall St. and his answer was an apologetic version of Taleb's "black swan" thesis.  My earlier pieces here and in print explain that argument, but here it is in a nutshell: we can't reasonably measure risk in financial markets with models based on standard deviation.

Here's my paraphrase of the man who once said "If you think you understand what I said, I probably misspoke..."