Mathematical formulas and the economic collapse

[MrAmsterdam]

http://en.wikipedia.org/wiki/David_X._Li

is a quantitative analyst and a qualified actuary who in the early 2000s pioneered the use of Gaussian copula models for the pricing of collateralized debt obligations (CDOs). The Financial Times called him "the world’s most influential actuary,"while in the aftermath of the Global financial crisis of 2008–2009, to which Li's model has been credited partly to blame, his model has been called a "recipe for disaster"
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Li himself apparently understood the fallacy of his model, in 2005 saying "Very few people understand the essence of the model." Li also wrote that "The current copula framework gains its popularity owing to its simplicity....However, there is little theoretical justification of the current framework from financial economics....We essentially have a credit portfolio model without solid credit portfolio theory." Kai Gilkes of CreditSights says "Li can't be blamed", although he invented the model, it was the bankers who misinterpreted and misused it.

Social believe systems and mathematical formulas go happy hand in hand...and it will sometimes lead to an enormous economic world crises...

Can the same be said about "wrong" mathematical descriptions of astronomical phenomena?

[mague]

Tower of Babel again

Once people recognize that money is a medium of exchange and nothing else all math. formulas are useless. They have been developed to maintain groth (or maybe status quo), not to exchange goods. It seems those are all remnants of the 1st towers breakdown. People say A and think B.

Same for science and all other disciplines. Intelligence is not mass and power of brain/computing and not based on DNA but the simple ability to differentiate. Boils all down to the good old purity of heart and mind

[phyllotaxis]

I think this will help explain Mathematics Versus Economic Logic

[tayga]

Economics is a set of ideals masquerading as a science. Economists apparently think that infinite growth is possible in a closed system. Thermodynamicists know that it isn't.

Even rock stars know it isn't

http://www.youtube.com/watch?v=IqFZGnfMLMw