## The Physics of Wall Street: A Brief History of Predicting the UnpredictableAfter the economic meltdown of 2008, Warren Buffett famously warned, “beware of geeks bearing formulas.” But as James Weatherall demonstrates, not all geeks are created equal. While many of the mathematicians and software engineers on Wall Street failed when their abstractions turned ugly in practice, a special breed of physicists has a much deeper history of revolutionizing finance. Taking us from fin-de-siècle Paris to Rat Pack-era Las Vegas, from wartime government labsto Yippie communes on the Pacific coast, Weatherall shows how physicists successfully brought their science to bear on some of the thorniest problems in economics, from options pricing to bubbles. The crisis was partly a failure of mathematical modeling. But even more, it was a failure of some very sophisticated financial institutions to think like physicists. Models—whether in science or finance—have limitations; they break down under certain conditions. And in 2008, sophisticated models fell into the hands of people who didn’t understand their purpose, and didn’t care. It was a catastrophic misuse of science. The solution, however, is not to give up on models; it's to make them better. Weatherall reveals the people and ideas on the cusp of a new era in finance. We see a geophysicist use a model designed for earthquakes to predict a massive stock market crash. We discover a physicist-run hedge fund that earned 2,478.6% over the course of the 1990s. And we see how an obscure idea from quantum theory might soon be used to create a far more accurate Consumer Price Index. Both persuasive and accessible, The Physics of Wall Street is riveting history that will change how we think about our economic future. |

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#### The Physics of Wall Street: A Brief History of Predicting the Unpredictable

User Review - Sara Holder - Book VerdictAs promised in his title, Weatherall (logic & philosophy of science, Univ. of California, Irvine) charts here the relationship between physics and financial markets. Inspired by coverage of the 2008 ... Read full review

### Contents

1 Primordial Seeds | 1 |

2 Swimming Upstream | 25 |

3 From Coastlines to Cotton Prices | 49 |

4 Beating the Dealer | 76 |

5 Physics Hits the Street | 105 |

6 The Prediction Company | 130 |

7 Tyranny of the Dragon King | 159 |

8 A New Manhattan Project | 181 |

Send Physics Math and Money | 205 |

Back Flap | 287 |

Back Cover | 288 |

Spine | 289 |

### Other editions - View all

The Physics of Wall Street: A Brief History of Predicting the Unpredictable James Owen Weatherall No preview available - 2014 |

The Physics of Wall Street: A Brief History of Predicting the Unpredictable James Owen Weatherall No preview available - 2013 |

### Common terms and phrases

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