Wednesday, February 25, 2009

One Number To Rule Them All

A fascinating and infuriating article on Wired that tells how a mathematical formula contributed to the market meltdown. It's a lesson in looking for the easy path and the power of the mentality of crowds.

The part that I'll remember the next time this happens (and it will, eventually):

In financial markets, everybody doing the same thing is the classic recipe for a bubble and inevitable bust.

Wired: Recipe for Disaster: The Formula That Killed Wall Street

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