17 February, 2009
Probability theory for journalists
If the probability of something is 1 in 1,000,000,000, that does not mean that the "1" cannot actually happen.
BBC interviewers aren't the only ones who have difficulty understanding probability theory- Bank CEOs/CFOs obviously thought that, via hedgeing, 'credit default swaps', and all the other financialisation paraphernalia, that hitherto 'risky' lending was a one way ticket to riches. More fool them- and more fool us for letting them fill theirs boots when the going was good.