Consider an argument Michael Lewis makes in his book The Big Short: nearly everybody involved in the mortgage-backed securities market (buy-side, sell-side, ratings agencies, regulators) bought into mathematical models valuing MBS as low-risk based on models whose historical data didn’t go back far enough to capture a collapse in housing prices. And it was precisely such a collapse that destroyed all the assumptions on which the models rested. But the people who saw the collapse coming weren’t people who built better models; they were people who questioned the assumptions in the existing models and figured out how dependent they were on those unquestioned assumptions. . . .I was mistaken in one of my comments below about the "Unskewed Poll" methodology. They do attempt to conform poll responses to a turnout model; they just use an unusual model.
Models and their perils
A good article on RedState on polling methodology, with comparisons to modeling of climate, housing markets, and baseball:
By Texan99 on Friday, November 02, 2012