February 24, 2009
You know, most of the time I'm happy to celebrate nerds and all they offer modern life. The computer, the pocket protector, chemistry, the awkward conversation, math, live action role playing. All the product of nerds. All of which make our lives better. But the financial crisis represents something else. A nerd failure. In this story from Wired magazine we learn about the dazzling mathematical formulas that "solved" the financial system. These formulas quantified risk. Only they didn't. The math failed. The risks were much, much grater than calculated. The results are the crash and burn that we are all living with today. Brought to you, sadly, by nerds.