"The brain's center of memory and navigation, once considered too disorganized to decode, may soon be unlocked. Using a brain scanner, researchers were able to determine the location of people standing in a virtual room from the activity in their brains.
"We could read their spatial memories, so to speak," said study co-author Eleanor Maguire, a University College, London, cognitive neuroscientist. "There must be a structure to how this is coded in the neurons. Otherwise we couldn't have predicted this."
"For five years, mathematician David Li's formula, known as a Gaussian copula function, looked like an unambiguously positive breakthrough, a piece of financial technology that allowed hugely complex risks to be modeled with more ease and accuracy than ever before. With his brilliant spark of mathematical legerdemain, Li made it possible for traders to sell vast quantities of new securities, expanding financial markets to unimaginable levels.
"His method was adopted by everybody from bond investors and Wall Street banks to ratings agencies and regulators. And it became so deeply entrenchedâ€”and was making people so much moneyâ€”that warnings about its limitations were largely ignored.
"Then the model fell apart.
"David X. Li, it's safe to say, won't be getting that Nobel anytime soon. His Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees.
"For casual readers of business coverageâ€”that is, most of usâ€”the past 18 months have been a crash course in things we never knew existed but that, we are told, have already done us all irreparable harm. Not only are the problems catastrophic, goes the somewhat frustrating message, but it is already too late to do anything about themâ€”other, that is, than pay for them.
"In looking back on how we got here, the business press assumes a tone of rueful omniscience, as in this late-2007 New York Times piece on regulatory laxity under Alan Greenspan: "Had officials bothered to look, frightening clues of the coming crisis were available." Of course, the clues the Times cites in the very next sentenceâ€”the ceaseless research of the North Carolina-based Center for Responsible Lendingâ€”were available had anyone bothered to look. So, a reader might well ask, why didn't the media?"
"One can think of several possible explanations for this failure. For one thing, the Wall Street collapse represents not only a story on the Journalâ€™s home turf but also the disintegration of its motivating vision. The paper that champions â€œfree people and free marketsâ€ is, I think, having a hard time coming to terms with the fact that free markets have just failed free people in a very big way. It has also, I imagine, been hard for the Journalâ€™s troops to concentrate as they undergo a wrenching change of ownership and begin to adjust to new marching orders from the Murdoch regime.
"…Thereâ€™s a lesson here in the limits of the daily journalism world view. Sometimes the heart of the story lies beyond â€œone personâ€™s tale.â€ Sometimes, as Felix Salmonâ€™s fascinating piece in the latest Wired â€” The Formula That Killed Wall Street â€” shows, it lies with a mathematical insight. Sometimes we need to turn to demographics, or history, or science."