Modeling and Modeling

The article linked above explains the shitty market in terms of its reliance on findings in 19th century botany and the presumption that acts in the market are random. Um... duh! My previous post about dealing with the delicate psyche of a beauty school student is not so unlike the conundrum of dealing with a fickle, emotions-based market. Is this really so surprising?

The article points out that risk models (quantitative computer models used by financial institutions to keep themselves out of just the hot water that they're in) failed to predict the explosion in the mortgage market. However, another kind of risk model, one I'm more familiar with, is one that is a little more qualitative. The kind of work I'm involved with looks at the risks to our society/environment via information about a company's impact on those parts of our lives, not pure, simple financial implications. The Christian Science Monitor has something to say about why funds like that did a little better amid all of this torture in the mortgage crisis. Kinda makes you think that those factors might indicate financial risk as well. Maybe the financial risk didn't come directly from the company, but how do you like having a saggy ass economy.

It's late. This is terrible. Sorry.