re: The Obama Bank Shakedown- "It has nothing to do with justice or restitution"

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John Maynard Keynes on models, " To convert a model into a quantitative formula is to destroy its usefulness as an instrument of thought."

Which means, stop using the modeling methods of the Engineering sciences to quantify 'risks' in financial instruments.

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That's not what that quote means at all. The quote was against taking a risk model at face value, which as you say below take a limited variable set. The key is the "instrument of thought" portion at the end of it, you must take every model with a grain of salt but the end result is its better to have a multitude of different models giving you a variety of information than it is to just throw darts in the fricking dark.

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PhDs??? About ~99.9% of these guys you refer to probably are not 'Decision Makers' in real life so why should I trust their academic hogwash models that have proven unreliable?

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I'm one of the biggest proponents of application versus academic ivory towers, but at the same time I understand that both sides need each other. CAPM is bullshite, EMH is a waste of paper, and I don't really believe either should be a focus of cirriculum for finance students. However, I will admit that there is a small element of validity in both, as with almost everything. Nothing is completely accurate but everything has some element of accuracy. I hate Austrian economics, especially the radical sect, however I openly admit that some elements of it have very valid points.

This is our difference, you're thinking very binary outcomes here, where if there was one mistake then all the models must be bullshite. shite happens sometimes, there is no such thing as a silver bullet. You get what information you can, model it the best you can, improve on it as you go the best way you can, and have the best people you can find to move the process. It's not meant to the end all be all solution for risk management, its meant to be a very strong chronic work in progress that will never, ever be finished.