Max Dama

How Models Caused the Credit Crisis

Salmon,

You seem to think that a revised rating means that the model has failed. A rating represents the likelihood of default assuming normal market conditions. Since conditions are significantly worse than they were during the rating process, we should expect revisions beyond the historic standard deviation of frequency.

The latin root of a word does not signify a deep immutable meaning.

"Models in general" (such as mechanical models of a bridge, or electrical models of a circuit, or economic models of supply and demand) are NOT to "blame". It seems supersticious to even consider.

Regards,
Max Dama