• Wall Street
• Modeling
• Risk
• How people game models
• How all models eventually fail

that I have ever read. It is must reading.

All risk management systems, all (complex) models for that matter, are examples of robust yet fragile systems: robust in the face of expected events, yet extremely fragile in the face of unexpected events. Of course we will "fix" our models and rebuild. But remember Hawkins Law:

Progress does not involve replacing one theory that is wrong with one that is right, rather it involves replacing one theory that is wrong with one that is more subtly wrong.

And that more subtle error will one day cause the edifice built upon it to come crashing down. And so it shall always be, since there’s no such thing as a free lunch.

I suppose whether or not to hark back to a word’s roots or context is a matter of taste. I personally love studying etymology — the history of words. And I often find it gives me greater insight into how the word is used today. For me, definitional context liberates my imagination — not constrains it. For example see my discussion of the shared roots of the words die, data, and date. Not everyone’s cup of tea, but it sure tastes good to me.

As Dave asked in his Manchurian Candidate post: "Are we so focused on tomorrow that we deny today and desecrate the past?" I hope the answer is the same for old words as well as old movies.

BTW, for those of you interested in such things, the "official" name for putting an anemic word in front of the original, unqualified word is retronym.