Beyond Risk Management. What Are The Alternatives?

When facing large doses of uncertainty risk model-based methods of managing uncertainty don’t work. One thing is to manage an assembly line producing, for example, computer chips, another is to run a company in a globalized, turbulent, chaotic, non-stationary and shock-punctuated economy. Some things can be accomplished via mathematical modeling some cannot. Sure, you can…

Is It Possible To Make Predictions?

Prediction of the future has always been man’s dream. However, there is an overwhelming amount of physical evidence that this is quite impossible. This is because the future is permanently under construction. Therefore, as every second passes, the future is changed. The cause of this are the laws of physics. If the future were predictable…

Coping With Turbulence: More Theories and Math?

Isn’t it time to review our theories on economics, to see them in a radically different light? What lessons are we learning from this and otherĀ  crises, if any at all? In the 1930 around 10000 banks have defaulted. The total amount of assets involved was equivalent to approximately 100 billion of today’s dollars. In…

What Cannot be Modeled Should Not be Modeled

Ludwig Wittgenstein sustained that “what cannot be debated should not be debated”. We say that what cannot be modeled should not be modeled. Otherwise one faces making massive investments with no tangible return. Based on our current understanding of physics and using our contemporary mathematics certain things are “impossible to model”. Therefore, we should not…

Is Risk Management a Source of Risk

The deployment of risk management within a business can be a source of false assurance. Over recent years, businesses have become more and more reliant on increasingly complex modelling processes to predict outcomes, to the point that in many cases, businesses have lost sight of what risk management is all about – and at the…