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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (39760)	12/18/2009 5:40:08 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

You are confusing the tail for the dog.... M.P.T. came FIRST, and the basic precepts of M.P.T. swept the global world of finance not 'because' of what any piddling little US federal agency did in one small area of just one market... but because M.P.T. offered the world a MORE POWERFUL way to factor out RISK... and a vastly more profitable opportunity for it's practitioners. Re: "sub-optimal private sector activity" Doesn't matter whether economic "activity" is private or public. ALL economic activity (in fact: most human activity) is inherently "sub-optimal", always striving for perfection, striving for a perfect understanding of the markets and always failing at achieving perfection. A new economic theory comes along, (like M.P.T.), it offers CLEAR BENEFITS over the old paradigms that previously held sway, and it sweeps the field before it, creating bigger profits for those who recognize the powerful advantage it offers over the old ways. But, nothing is ever perfect, certainly including M.P.T. ALL theories must constantly be tested and, when found lacking, improved upon or tossed onto the trash heaps. And the one, big, glaring flaw the Global Financial Crisis illustrated very clearly in M.P.T. is that it (at least as the mathematical models used to be calculated!) EPIC FAILED at assessing the real world possibilities for "fat-tailed events" happening. For the occasional "Black Swan" to land in our midst....