Just some odd remarks.
1. Re Paul’s Name and Blame blog: I don’t think quants are the main mover behind the current crisis, which was driven much more by cheap credit and a chain of players from homeowners to securitizers and everyone in between trying to take advantage of it. But I do think CDO models are vastly overrated and users have conveniently turned a blind eye to their faults.
It is not uncommon to compare correlation models to Black-Scholes. But options markets have observed and often liquid implied volatilities, observable realized volatilities, and some strategy for replication. The correlation markets have little liquidity in implied default correlations, no observable realized correlation of default probabilities, and no replication strategy. The analogy is much too simplistic.
2. Nassim Taleb in his adjacent blog affirms that “Yes, many of you (providers of risk measures) will be sued by the innocent people who lost their savings –like tobacco companies who were sued by the innocent smokers.”
False analogy. Smokers haven’t been innocent since I was a child. It’s like people who get fat and then sue McDonalds. This self-victimizing attempt to blame others for one’s behavior is one of the less pleasant characteristics of politically correct behavior.
Those who blame Bob Steel’s optimistic statements about Wachovia for their purchase of its ultimately doomed stock are also letting themselves off the hook.
3. Following up on an earlier theme, the urinals at JFK Airport in Terminal 4 (illustrated) have a black fly (member of animal, not the mineral kingdom, zipless) embossed or stuck on the porcelain, just off-center, an elegant touch. It looks quite real. I checked Wikipedia as I’m writing this, and they beat me to this piece of information, which I’m pretty sure is unlikely to be in the Encyclopedia Britannica.