Poor Hasty Action and Securities Math Models

                       

I have often mentioned, referring to booms and busts and the role of quants in attempting to prevent them, there’s a weakness in the form of hasty use of math models. It happened with the LTCM breakdown and was a factor in the sub-prime crisis.

                       

There is a common thread among financial breakdowns. They have to do with how the financial community reacts to problems. They panic. Our “experts” who come to the rescue are from the financial community, attuned only to the short term and cannot see how caution, and avoiding impulsive action can overcome the danger of acting in haste,

                       

There was a human error in these past “rescue” instances, other than in mathematical calculations. It had to do with the need for bailout haste.

                       

Has anyone ever questioned the fact that experts we have relied on are all attuned to the short term in their professional areas of expertise?(See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)