BUILT FOR WHAT WE CANNOT FORESEE
Five centuries of risk management gave us better maps, not certainty.
The final article asks how we can remain capable of acting after surprise arrives.
@richb118.bsky.social
@richb118.bsky.socialBUILT FOR WHAT WE CANNOT FORESEE
Five centuries of risk management gave us better maps, not certainty.
The final article asks how we can remain capable of acting after surprise arrives.
@richb118.bsky.socialTHE RIVER THAT WAS NOT ON THE MAP
The mortgages were packaged. The securities were rated. The risk appeared to move elsewhere.
Then the housing market fell.
@richb118.bsky.socialTHE FORMULA AND THE WORLD
Black–Scholes made options easier to price. It could not promise that a hedge would be tradable in a crash.
Article 4: atstradingsolutions.com/the-origins-...
@richb118.bsky.socialTHE TABLE AND THE WORLD
Mortality tables transformed insurance by finding patterns across populations.
Markets are different. Participants observe the model, react to it and change the system.
Article 3:
@richb118.bsky.socialTHE SEA DOES NOT NEGOTIATE
Venetian merchants could not predict which ships would return.
They built structures that allowed them to survive when one did not.
