So the Dow crashed out about 7% last night to its lowest since 2003. This, the Nikkei fell ins response. Who knows what will happen to STI?
This is shaping up to be a bigger financial crisis than many people had expected.
Which made me wonder a bit about how people assessed risks. This sub-prime mess was clearly about greed, but I can't help thinking that behind it all was really the complete inability of people to assess risks. The writing had been on the wall for a long time, but people kept wishing it away, and generally ignoring all the warning signs. I must confess that I myself had been tempted on more than one occasion to take a punt or two.
People really have no ability to assess risks. I think this is something very biological. Our entire physiology is calibrated to either flee or fight...i.e. we operate on the basis of a predetermined threshold of danger. The first response is to run...if not, then to stay and fight it out for survival. In both situations, the adrenaline gushes. We are simply not designed to respond in a rational way to graded levels of risk. We simply cannot make the distinction between 0.03%, 30% or even 300%. We simply decide if enough is already too much. Is it time yet to panic? By which time it is usually too late.
A few days ago, a colleague was commenting to be that it was simply impossible to convey to patients the risk of a certain medical procedure, or medication. How true...and I wondered if anyone thinks about the risk of the doctor sticking his scope through the walls of his gut, and his chances of dying from that as compared to the remote risk of his getting colonic cancer and dying from that. Or how about trying to impress upon people that smoking carries a risk of lung cancer? What was that risk, by the way, if one smoked 20 fags a day? If one smoked 2 stick a day? Or your real reduction in risk of dying from breast cancer if you went for the new fangelled breast scan?
Yet we keep bombarding people with numbers reflecting risks of this and that...as if anyone was able to make sense of the information. "Caveat emptor!" We cry. Yet can anyone reasonably emptor the caveats?
Interestingly My Paper today carried a front page report on the recent Nielsen study about Singaporean's bad health attitudes. Need I say more?
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