http://www.nytimes.com/external/idg/2008/10/23/23idg-Greenspan-Bad.html?scp=2&sq=greenspan%20tsunami%20models&st=cse
The two most fascinating paragraphs are below / its also fun to note the
federal sentencing guidelines now take into account the financial impact
amount of fraud which means our merry Quants could be doing multi
lifetimes in the pokey
/
/
/But at a hearing
<http://www.idg.com/www/rd.nsf/rd?readform&u=http://oversight.house.gov/story.asp?ID=2256>
held today by the House Committee on Oversight and Government Reform,
Greenspan acknowledged that the data fed into financial systems was
often a case of garbage-in, garbage-out.
Business decisions by financial services firms were based on "the best
insights of mathematicians and finance experts, supported by major
advances in computer and communications technology," Greenspan told the
committee. "The whole intellectual edifice, however, collapsed in the
summer of last year because the data inputted into the risk management
models generally covered only the past two decades a period of euphoria."
He added that if the risk models also had been built to include
"historic periods of stress, capital requirements would have been much
higher and the financial world would be in far better shape today, in my
judgment."
/
/It was unclear from Cox's testimony just what sort of regulatory
changes he was suggesting. But he said that the SEC is now engaged in
"aggressive law enforcement/
--
Peter Baston
*IDEAS*
/www.ideapete.com/ <http://www.ideapete.com/>
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