The Physics of Wall Street: a brief History of Predicting the Unpredictable

“. . . because in 1934 the U.S. government instituted the Federal De-
posit Insurance Corporation . . .”: for more on the history of the fdIc, and other changes 
in the financial regulation in the United States, see Markham (2002).
220
“But what caused the quant crisis?”: there remain many views on 
what caused the financial crisis, including the quant crisis. for instance, see Shiller 
(2008), Krugman (2008), Zandi (2008), McLean and nocera (2010), or the financial 
crisis Inquiry commission (2011). the analysis presented here is heavily indebted to 
Gorton (2010).
222 
“First was Renaissance . . .”: this part of the story is from Patterson 
(2010).
222
“The securitization procedure by which subprime mortgages . . .”: the 
model is presented in Li (2000). See also Salmon (2009).
224 
“. . . it seems poised for another collapse”: for a picture of the deep 
financial and economic problems lurking under the surface of the world’s economies, 
see rajan (2010).

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