> The financial crisis that brought the world economy to its knees was caused largely by bad statistics. Analysts assumed that the values of mortgages are Gauss

> The financial crisis that brought the world economy to its knees was caused largely by bad statistics. Analysts assumed that the values of mortgages are Gaussian, and that the tails of mortgage values aren’t more correlated than than mortgage values are on average. Analysts did use models that take into account that the tails are more correlated. Arguably overconfidence on these sophisticated models brought complacency and led to excessive risk taking.