On Sat, Oct 31, 2009 at 8:58 AM, Ted Winslow <egwinslow at rogers.com> wrote:
> Carrol Cox wrote:
>
> But there is not one iota of excuse for the gross stupidity that one can
>> judge the validity of a propositon by a characterization of the person
>> who prnounces it. It is either gross ignorance to do so or a serious
>> psychological problem if one is unable to consider a proposition in
>> abstractin fromt personality.
>>
>
> You can, though, do what you're doing here, i.e. explain, having shown on
> rational grounds that an ad hominem argument is mistaken, persistence in ad
> hominem as an expression of a "psychological problem".
>
> This you will be required to do if you want to explain the most recent
> financial crisis.
>
> You will need to explain, for instance, the particular individual David
> Li's misidentification of a rational method for measuring the risk of
> correlated default with a mathematical formula based on the premise that
> existing market prices already embodied such a method. Then you will have
> to explain why the "quant" mentality dominant in financial derivative
> markets unreasonably embraced the formula as a measure of the actual risk.
>
> This had the result that the risk of correlated default on mortgage backed
> securities on which correlated default was practically certain was judged to
> be close to non-existent which led, in turn, to the explosive growth both of
> these securities and of "insurance" against their default.
>
> So a "serious psychological problem" of "particular people" played a key
> role in generating the conditions from which the crisis emerged when the
> practically certain correlated default actually occurred.
>
> Ted
>
>
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>
-- ********************************************************* Alan P. Rudy Dept. Sociology, Anthropology and Social Work Central Michigan University 124 Anspach Hall Mt Pleasant, MI 48858 517-881-6319