Been reading Stiglitz 'Freefall'. His explanations of risk management in chaotic systems, complexity and derivatives reminds me of reading long ago how Wall St. was hiring physics geeks to generate winning formulas. Derivatives as a way to manage risk in a chaotic system, even Scientific American, where i read about it, mentioned how math theory was one thing unrecoverable disaster another. The Precautionary Principle eh, if ya gotta a few bucks extra after all the bills are paid and you wanna go to the casino its called entertainment, win-lose, no-disaster. But if you're in debt and you're in the casino to win back the rent money you already owe its called idiocy, big-disaster. Never bet what you can't afford to lose no matter how much of an edge you think you've got. When taking smaller risks, making smaller bets, make sure there's compensation enough to cover the risk, just common sense eh.
The same story for lottsa stuff, climate change for instance is where big disaster makes the PP rule, banking too according to Stiglitz, whereas other stuff like being a couch potato may turn out to be a personal disaster or not [you get run over by less buses for instance] therefore each of us chooses our couch riding time with less of an eye on ol' PP, its only logical.
We poor fools who try to use logic, debate, experimentation to inform our worldview can never be 100% certain of anything. We know that once in awhile 'The Black Swan' question arises and that something rare, extreme and unpredictable can happen that changes our worldview. We poor fools hold ideas to be true until some new information comes long that refutes those old ideas and we subsequently form new views. Our ideas and ideals resemble Sideshow Bob's hair, the 'Absolute Certainity' folks sport more of a Pat Boone look
At the moment, we all have but one certainty...
