The Physics of Finance: Predicting the Unpredictable: How Science Has Taken Over Wall Street

Aftertheeconomicmeltdownof2008,manypunditsplacedtheblameon"complexfinancialinstruments"likederivatives,andthephysicistsandmathematicianswhodreamedthemup.ButayoungacademicnamedJamesOwenWeatherallquicklybegantoquestionthisnarrative.Werethephysicistsreallyatfault?Inthisimportantandentertainingbook,Weatheralltellsthestoryofhowphysicistssuccessfullybroughttheirsciencetobearonsomeofthethorniestproblemsineconomics,changingWallStreetforever.Heshowshow-catastrophically-thissciencefellintothehandsofpeoplewhodidn'tunderstandit,anddidn'tcareto.Weatherallarguesthat,whilethemathematicalmodelsdidhavetheirfaults,disasterarosebecausefinancialinstitutionsfailedtothinklikephysicists.Mathematicalsophisticationistheremedy,hesays,notthedisease.