Credit Models – Derivatives – Dust and Details

By explaining the concept of a credit score we can see how statistical models evolved, eventually into derivatives. Models work till they don’t. Most derivative models are nothing more than “scientific math gone wild.” Derivatives are a “catch all phrase” that cover many contracts that rely on complex “math models.” I mention and link Black-Schoels, Taleb, 1987, 1984, LTCM, AIG, GS, coal dust, brownian motion, differential equations, , atoms, conforming loans, Einstein, Neanderthals, Homosapiens, United Healthcare, Ingenrix, misallocated scientists, counter-parties, and See Jane Run together. I talk about how the Supreme Court destroyed privacy in the United States. In an act of hubris I even quote myself with Orwell sitting in the background.