MAYBE WE SHOULD SEE THESE MODELS

The mathematical models the MOTU used helped bring us the Great Recession and now we learn that a model seems to be behind the JP Morgan screw up:

Analysis: JPMorgan to be haunted by change in risk model
By David Henry

Fri May 18, 2012 5:13pm EDT

(Reuters) - JPMorgan Chase & Co's decision to radically change the way risk was measured in its Chief Investment Office is likely to dog the bank in the developing crisis over the big trading losses it has suffered.

The move, which allowed the bank to disguise the level of risk that the CIO was taking in its trading, could become a major focal point of investigations by the U.S. Securities and Exchange Commission and the FBI, former regulators said. It also will likely become part of investor cases in lawsuits against the bank and its executives.

The change made the CIO's portfolio, which totaled about $375 billion, appear to be a lot safer than it actually was and gave traders more leeway to make risky bets. The rest of the bank's divisions apparently kept to more conservative modeling.