Archive for July, 2012

Date: July 24th, 2012
Cate: Risk & Stability, Systems

A great paper on how networks become brittle due to interconnection

This is a rare document which understands how networks function and how things are interconnected.  My own opinion is that the network of society is more resilient than illustrated and will bounce back, but the reality of cascading failures and overly centralized architecture are very valid.

This is a great document using the correct language of degraded performance, cascading failure and resiliance.  It is worth the read and highly educational.  Copyright warning, I have posted this is scribd, hoping it gets a larger audience. It is the work of Feasta.

Date: July 24th, 2012
Cate: Finance, Risk & Stability, Systems

Excellent video on complexity in finance and systems. relates CDS to oil rigs and normal accidents.

Ht to Farnam Street

An excellent introduction to tight coupling, feedback and systems.  The piece also includes normal accidents, safety systems leading to normalized risk and hidden paths in systems that induce risk.

Date: July 16th, 2012
Cate: Finance, Risk & Stability, Systems
1 msg

Non-normality and financial risk

Andrew Haldane at the Bank of England often presents information in very clear forms.  Here he attacks the normality assumptions found in many financial models.  The systems thinker will not be surprised.  Enjoy the paper, it is very good.