From the Financial Times:
Since the global financial crisis, there have been two contrasting views of the role played by mathematics and physics in the markets. One school blames out-of-control scientists for creating insanely complex financial derivatives and for driving computerised trading with algorithms too impenetrable for anyone to understand. As investor Warren Buffett famously put it: “Beware of geeks bearing formulas.” The counter-argument, advanced in The Physics of Finance, is that the markets have been driven by scientifically illiterate financiers who could be rescued from their folly by a good dose of cutting-edge maths. “The crisis was partly a failure of mathematical modelling,” James Owen Weatherall concedes. “But even more it was a failure of some very sophisticated financial institutions to think like physicists.” Weatherall, an assistant professor of logic and philosophy of science at the University of California, Irvine, has written an entertaining but selective account of the contributions made by scientists to the theory and practice of finance. In fact, his book is mainly about maths, though he writes as much as possible about “physics” and “physicists” – presumably because he thinks they sound more glamorous.

For the full story, please visit http://www.ft.com/intl/cms/s/2/2389565e-7478-11e2-80a7-00144feabdc0.html....