Why Irrational Finance Practices Live On
They express frustration over the fact that these models despite their failure live on, and calls for everyone to confront the quants and point out their uselessness. But what they leave out is why this irrational business practices live on. That they live on in academic circles should perhaps not be too shocking as no market test exist there. What is more interesting is that they live on in financial firms who do face a market test. The explanation for that is very simple though, that because failed financial firms are bailed out by the government, this means in effect that their failed practices are bailed out too and live on.