The Physics of Wall Street: A Brief History of Predicting the Unpredictable

James Owen Weatherall

ISBN 10: 0547317271 / ISBN 13: 9780547317274

Published by Mariner Books, 2013

Pages can have notes/highlighting. Spine may show signs of wear. ~ ThriftBooks: Read More, Spend Less. Seller Inventory # G0547317271I3N00

Synopsis:

After the economic meltdown of 2008, Warren Buffett famously warned, “beware of geeks bearing formulas.” But as James Weatherall demonstrates, not all geeks are created equal. While many of the mathematicians and software engineers on Wall Street failed when their abstractions turned ugly in practice, a special breed of physicists has a much deeper history of revolutionizing finance. Taking us from fin-de-siècle Paris to Rat Pack-era Las Vegas, from wartime government labs to Yippie communes on the Pacific coast, Weatherall shows how physicists successfully brought their science to bear on some of the thorniest problems in economics, from options pricing to bubbles.

The crisis was partly a failure of mathematical modeling. But even more, it was a failure of some very sophisticated financial institutions to think like physicists. Models—whether in science or finance—have limitations; they break down under certain conditions. And in 2008, sophisticated models fell into the hands of people who didn’t understand their purpose, and didn’t care. It was a catastrophic misuse of science.

The solution, however, is not to give up on models; it's to make them better. Weatherall reveals the people and ideas on the cusp of a new era in finance. We see a geophysicist use a model designed for earthquakes to predict a massive stock market crash. We discover a physicist-run hedge fund that earned 2,478.6% over the course of the 1990s. And we see how an obscure idea from quantum theory might soon be used to create a far more accurate Consumer Price Index.

Both persuasive and accessible, The Physics of Wall Street is riveting history that will change how we think about our economic future.

About the Author:

JAMES OWEN WEATHERALL is a physicist, philosopher, and mathematician. He holds graduate degrees from Harvard, the Stevens Institute of Technology, and the University of California, Irvine, where is presently an assistant professor of logic and philosophy of science and a member of the Institute for Mathematical Behavioral Science. He has written for Slate, Scientific American, the Boston Globe, and other publications.

Bibliographic Details

Title: The Physics of Wall Street: A Brief History ...
Publisher: Mariner Books
Publication Date: 2013
Binding: Hardcover
Condition: Good
Dust Jacket Condition: No Jacket