Last August, The Wall Street Journal published a statement by one Matthew Rothman, financial economist, expressing his surprise that financial markets experienced a string of events that “would happen once in 10,000 years”. A portrait of Mr Rothman accompanying the article reveals that he is consider­ably younger than 10,000 years; it is therefore fair to assume he is not drawing his inference from his own empirical experience but from some theoretical model that produces the risk of rare events, or what he perceives to be rare events.

The theories Mr Rothman was using to produce his odds of these events were “Nobel-crowned” methods of the so-called modern portfolio theory designed to compute the risks of financial portfolios. MPT is the foundation of works in economics and finance that several times received the Sveriges Riksbank Prize in Econ­omic Sciences in Memory of Alfred Nobel. The prize was created (and funded) by the Swedish central bank and has been progressively confused with the regular Nobel set up by Alfred Nobel; it is now mislabelled the “Nobel Prize for economics”.