I think it is indisputable reach the conclusion that all the theories of quantification financial risks have proved flawed. The management of savings was based the assumption that the risks could be quantified and reduced, with the identification of strategies suitable, they would then have been obtained yields in excess of cost of capital plus risk, and in fact for many years had been. The best mathematical minds, the best programmers software, the most savvy stock traders were avid to seek imperfections mechanisms of functioning of financial markets (particularly in the prices of risk), and some of them were also found, at least temporarily. Furthermore, the majority managers has never managed to beat the benchmarks in a systematic, so that even in times when all the bags grew very skilled operators were few. The fund management industry was based on time series analysis, especially the volatility of securities; measures like the Sharpe ratio (volatility), or formula for evaluating Options such as the famous Black-Sholes (option pricing model) were based Always meticulous analysis of time series, but they neglected the probability of a discontinuity (that instead there has been enormous in size and intensity). The typical mechanism through which a farmer must have a winning strategy was to “play” this formula retroactively (or evidence of having done actually) for periods long enough, demonstrating that it can achieve a result greater than the cost of capital and risk on the basis of that proof was justified to ask for commissions management of funds. The asset management industry was concentrated in construction products that are increasingly sophisticated and complex, there was always the underlying research philosopher’s stone, that is of a temporary imperfection undiscovered by many others, that could be exploited to generate a relatively “safe.” But the overall risk can never be reduced, it can only be transferred, for example, if the person buys a house and only pay an installment loan of 10% is a strong risk default if prices fall, the risk can be transferred by selling the loan to a attracted by his seemingly naive high efficiency. The risk then increases exponentially as housing prices grow and misaligned with the capabilities income (or pay rent), but those inside the bubble does not notice because every month the prices are higher than the previous month, and the game seems to be profitable. But if all a country like the U.S. behaves in this way, sooner or later the bubble bursts in the portfolios of banks and households.

But we also learned that the risk you can not measure and manage because the imbalances do not adjust gradually, and when someone realizes that it is better to escape notice this and skip all the system: the systems are no longer there and fail, the Savers move from an acceptance of a risk is not known to be unwilling to take any risk, all at top speed and simultaneously in all markets. There are physical theories of the disaster, but the economy has never been shown to know how to apply management of savings. If in the time series used to demonstrate the advantage an investment strategy will include recent events, no formula resist this “stress test”, which means that the risk is not easily quantifiable, that “rare events” are not, and that in essence, no longer able to demonstrate to the table advantage of a strategy of investment, a corollary is that you are no longer in a position to ask the Commission (the investor has realized that to lose money does not need advice!).

But we also learned that the risk you can not measure and manage because the imbalances do not adjust gradually, and when someone realizes that it is better to escape notice this and skip all the system: the systems are no longer there and fail, the Savers move from an acceptance of a risk is not known to be unwilling to take any risk, all at top speed and simultaneously in all markets. There are physical theories of the disaster, but the economy has never been shown to know how to apply management of savings. If in the time series used to demonstrate the advantage an investment strategy will include recent events, no formula resist this “stress test”, which means that the risk is not easily quantifiable, that “rare events” are not, and that in essence, no longer able to demonstrate to the table advantage of a strategy of investment, a corollary is that you are no longer in a position to ask the Commission (the investor has realized that to lose money does not need advice!).