In comments to my earlier post on the faulty math underlying Wall Street's risk analysis, Brian takes issue with my argument that greed explains why so few traders questioned the numbers they were seeing:
I don't think it's greed -- that's the easy, conventional, and unexamined explanation. Really I think the answer is laziness, or whatever combination of forces cause us to cut corners in our work and in our everyday lives. The copula function made life simple for traders, so they used it. Probably even those who understood the underlying assumptions figured that they weren't likely to change all that much, so why bother worrying about them? The shortcut works, and so after awhile people forget that it's even a shortcut, and it's not until things get screwed up that everyone looks back and points out how important the skipped step really was.
