Second, when I reached the section on poker players, I was struck. It instantly made me think about the very recent financial crisis. Not because, I want to compare financial instruments to gambling, but rather because the decision process within both groups (financiers and poker players) is, in my view, quite similar.
In the book, when Lehrer talks about good poker players, he relates to their ability to stop calculating the odds and refer to emotions. Basically, the rational side of the brain becomes rather secondary.
The financial crisis appeared to be the exact opposite: students of finance and economics forgot (or put aside) the “something is not right” feeling and favoured some set in stone math prinicples.
Many reporters seem very keen on saying that economists did not see the crisis coming, but it makes me wonder if it’s not more that analysts and economists indeed saw it coming, but they instead ignored their perceived emotions and continued to refer to overcomplicated calculations that could not fail – theoretically.
Was the financial crisis really unpredictable or was it a badly played poker hand?