Wednesday, August 29, 2007

Nature's Casino

The cover story in last Sunday's NY Times contains many elements that fascinate me. It mixes an immigrant story, mathematical modeling of statistically improbable but extremely damaging events, risk analysis, meteorology, a motherhood story and human behavior. Read Michael Lewis' In Nature's Casino. It is delicious.

I especially like the part where a visibly pregnant modeler, Karen Clark, explained to a roomful of men at Lloyd's of London that they faced extremely high financial exposure when an Atlantic hurricane hits a heavily populated area. That one had not done so recently was just dumb luck and the luck would eventually run out. They told her that they understood their risk quite well, thank-you very much. Then Hurricane Andrew hit and bankrupted many of the Names of Lloyd's.

2 comments:

  1. Great article. Thanks for the heads-up.

    I definitely needed the break from reading an extraordinarily bad report discussing "post-liminary" data. That is the report following the earlier discussion of the "pre-liminary" data.

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  2. My bad, I guess that is actually a word. But still, very bad writing overall.

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